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How does buying a house affect aid???

Discussion in 'Financial Aid' started by maitai, Jun 13, 2002.

  1. i've got enough savings for a down payment, so i'm thinking about buying a small house for med school. i remember reading some threads about this a while back, but i don't remember them addressing the issue of financial aid. is it good or bad for financial aid purposes to have a mortgage in my name? what about if it was in my parents' names? thanks for any help!
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  3. aka-Jalopycat

    aka-Jalopycat Junior Member 7+ Year Member

    Jun 3, 2002
    I bought a house without a co signer 5 months ago before I filled out my fafsa. However, I did not mention one word about medical school or possibly being unemployed in less than a year...

    I didn't have any trouble getting financial aid last month for school.This late in the game, a mortgage lender may want a co signer for you.
  4. mpp

    mpp SDN Moderator Moderator Emeritus 10+ Year Member

    Jan 17, 2001
    Portland, OR
    It can be beneficial to have a house in terms of financial aid. In this way the savings that you put into the home as a down payment are not considered for your EFC and therefore may make you eligible for subsidized loans for which you were not previously eligible.

    Check out the College Aid Calculator at <a href="" target="_blank"></a> . It can help you determine your EFC. This way you can see what owning a house will do to your EFC.
  5. k's mom

    k's mom Senior Member 7+ Year Member

    Nov 12, 2001
    Pennsylvania, via Tucson
    Depending on your age you also get a certain amount of assets protected from being considered in the financial aid formula. If you are under 25 it is zilch, but for my husband (married, age 32) it is $17,500. Obviously, it goes up each year, and is higher if you are married.
    Makes me wish we had $17,500 in assets!
  6. paean

    paean Senior Member 7+ Year Member

    Apr 21, 2002
    If your parents already own a primary residence, the school will consider a second house in their name an available asset to pay for your education. Better if it is in your name. The federal formula allows you to own a primary residence without much of an effect on your EFC, but your school may figure your EFC differently. If you have the money available in savings, they will assume you will use it for school expenses. If you put it into a house, they may hold it against you, but many schools won't.
  7. thanks for your help, everybody. okay, let's pretend i gave the money away to some friends, but they're gonna surprise me this fall by giving it back. does anyone know how much is "protected" if you're 25 and single, or where i can find out? also, are there any other opinions on whether it's better for the house/condo to be in my name or my parents' name for financial aid purposes? thanks again!

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