refinancing house options, advice to optimize financial aid?

Hi, my daughter is taking a gap year and we will reapply for financial aid in January. she will start as a freshman 9/2016. Her school does Custodial Profile and Non-Custodial profile for the first year, after that, just FAFSA.

I have a multi-family house (2 units) where I live in 1 unit.
I am looking at refinancing my 1st mortgage, Home Equity Loan, and some random personal debt.
I know it’s beneficial

In terms of affecting financial aid awarded, does anyone have the expertise to recommend if one or another of these options is better than another?

  1. do FAFSA or Profile distinguish between 1st Mortgage, HELOC (line of credit), or 2nd mortgage (fixed rate home loan?)
  2. If I have a HELOC that has a total line of say 80K, but have only borrowed 60K from--will the 20K be visible to fin aid or hurt me in any way?

thanks in advance.

Will this really make a difference at all financial aid wise? Does the college guarantee to meet full need? Will your home equity change? Is your income such that all these financial gymnastics might not matter?

With profile, it probably does not make much difference as equity may be counted as asset anyway.

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I have a multi-family house (2 units) where I live in 1 unit.


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This may be your bigger problem.

Only half of that house is your “primary home”. So, the other half’s equity and rent will count on FAFSA. CSS will look at all the equity and rent.

So…if the whole house is worth - say - $400k - and you own $200k, then $100k will be equity in your “primary home” (protected on FAFSA, maybe not on CSS Profile)…but the other $100k will be equity in rental property…and will affect FAFSA and CSS Profile. and the rent will count on both FAFSA and CSS.