<p>I (Mom) am going through a messy divorce. Daughter has a VERY generous scholarship/Aid/Pell package from Georgia Tech this fall. I am closing on a new home in a few weeks, but there is a new giant wrinkle. The lenders are insisting that my soon-to-be-ex must have his name on the mortgage note if the divorce is not final, even though he is in no way involved in the payments or qualification for the loan. (Florida) I will not let that happen as I can't trust him to sign over anything to me and he is hell-bent on screwing me over in any way he can now. My mother and sister are hatching plans. One is to possibly pay cash (theirs) and put the house in my student's name, then my student can claim the homestead exemption for lower tax purposes and also qualify as a first time home buyer for the $8000 tax credit. (I won't qualify for the tax credit unless the divorce is final at time of purchase, which it won't be.)</p>
<p>How might that screw her over for financial aid? I won't do that if it hurts her. She basically has a full ride OOS.</p>
<p>It might “screw her over” for taxes. Have your mother and sister looked closely at the tax ramifications of making a cash gift of that value to your daughter?</p>
<p>Whether the house would affect her financial aid may depend partly on whether GT uses the FAFSA and/or CSS/PROFILE. However, the cash gift which she would use to purchase the house (in order to qualify for the tax exemption) may have to be reported as income.</p>
<p>I wouldn’t do this sort of thing without consulting an accountant and/or an attorney who specializes in estate planning. Instead, I would look into getting a “sole and separate property” line in the contract – or a different lender.</p>
<p>If he is merely on the mortgage, then you don’t have to worry about him signing over anything to you. If he is on the Deed, then that is a different issue. But, you can probably get the court to deal with the issue.</p>
<p>If he is merely on the mortgage, good luck in getting him to sign that.</p>
<p>Note: you can loan your son the downpayment for the house and put a 2nd lien on the house. then the equity in the house will be $0. That might take care of the financial aid issues. There is an issue about how you disclose that “loan” to the mortgage company. I’m guessing you will have to co-sign the mortgage, so it might be a non-event.</p>
<p>However, it might be your state law that requires your husband to co-sign on loan docs. In such instance, co-signing on your son’s mortgage may trigger the same requirements.</p>
<p>I think it sucks that married persons can barely get assets without putting their partner’s name on everything. I’m married, not fused at the hip.</p>
<p>I second the advice that you need an attorney and/or an accountant to help you sort this out. Preferably, an accountant who knows something about student financial aid, too. The house shouldn’t affect the financial aid too much because Georgia Tech uses the FAFSA and not the CSS PROFILE, which takes into account the value of your current home.</p>
<p>Georgia Tech utilizes FAFSA only. It is very unlikely that a primary residence (which this would be categorized as) would influence her FA at all.</p>