Hi
I’m thinking of buying a house since renting is so expensive now so I think is better to invest in a small house.
I’m a return independent student who is in the late 20s, almost 30. I am currently receiving fafsa grant for college since I’m working part-time(25-35 hr/wk) retail job.
Anyway, I’m thinking of buying a small house (less than $300k) since rent is so expensive, that way I can also rent out the extra room. I will be buying the house on mortgage and maybe borrowing a little from my parents . So I’m just wondering if it will affect my fafsa grants.
It depends but very likely it will. You may turn some asset into protected asset (primary residence), but you will also have a rental income.
Checking for clarity…you have enough money to pay the mortgage on a $300,000 house? And the down payment? And the insurance? And the taxes? And the maintenance when something breaks?
On 25 hours of retail work per week? And college costs too??
Even with renting a room out…you first have to qualify for the mortgage.
I have a little saving for the down payment, but my parents Will be lending me some money to help a little in the beginning.
What will be the loan terms with your parents? It needs to be a bona fide loan, otherwise you will be looking at something that more closely resembles a gift or a bill payment for your benefit, in which case it will need to be reported on FAFSA as untaxed income to you.
Can you wait to buy this house until October of your senior year in college?
Or…thinking out loud here…
@BelknapPoint if the parents gift that money to the student…or pay on his behalf in 2018…wouldn’t that not appear until the 2020-2021 FAFSA? If that is the case…will the OP even still be IN college by that time?
If you are getting a roommate anyway, why not share an apartment with someone to reduce the cost of rent?
What if you want to relocate for a career once you are done with college, and then you have this house you own and need to sell?
I agree there are many hidden costs with home ownership and I think it’s better to wait to buy a house when you are planning on living there for a long time, and have a good stable income.
It is difficult to qualify for a loan if part of the ‘payment plan’ is getting money from other people, including parents or roommates. Lender are very reluctant to lend under those terms
If you want to do it, contact a mortgage lender or broker and see what is available. Many states have programs for first time buyers and that’s a place to start.