Negative Home Equity?

Paying for College
1

<p>We made a career move in 2006 just as the housing bubble was exploding and while we feel fortunate to have unloaded our previous house, we have lost all of the equity we had built up through a couple of upward moves and now "own" a mortgage that is $20-25,000 greater than the current value of the home. </p>

<p>D1 is applying to a number of schools that require the College Board's PROFILE which includes home equity.....is this going to prove a significant "silver lining" to our predicament?</p>

2

<p>Hmm...good question. I'm not sure you get "credit" for negative home equity. You just would not have any home equity that would be assumed to be usable for college expenses. In other words, I don't think you get to subtract that negative amount from anything. So...silver lining..I don't think so.</p>

3

<p>Yes, this should help if the aid calculator you are using factors in home equity. Silver lining indeed.</p>

4

<p>When I filed out the CSS Profile in February 2008, I was not allowed to put the debt owed on home as higher than the market value of our home. Due to the real estate market being the way it is, I asked our real estate agent for a fair market value on our home. The result was that yes, what we owed on our home was more than the market value of our home. On the CSS Profile, I ended up putting the market value & the debt owed on it as the same amount. I then put a note in the special circumstances on the bottom of the Profile & I also included the correct numbers in a letter to the college along with the tax returns, out-of-pocket medical expenses & the amount of our state & local taxes. So yes, you have negative assets, (unless you have 100K or something in the bank) so your EFC will probably not include a contribution from assets, only contribution from income, which is an advantage. Get the book, "How to Pay For College without Going Broke"-Kalman Chany, Princeton Review. The 2009 Edition will be out soon (like October) it is for your 2008 Tax Return & school year of 2009-2010. But go ahead & buy the book & calculate your EFC for private schools with your 2007 Tax Return OR use estimated income tax figures for your 2008 return.</p>