How does owning a house affect financial aid (Scholarships and Grants)???

[Doc.Ope]

Hi Everyone,

I'm new to this site, but a little bit about myself. I'm a recent graduate who will be applying during the 2021 Cycle (Starting med-school 2022).

My major question pertains to having a house in my name when filling out the FAFSA. After some research, it is my understanding that owning a house or having a house in my name would not affect loans (somebody please check me on this, thank you!). But what I couldn't find out is if this would affect scholarships or grants for school.

Also, this is a family house which happens to be under my name and parent as co-signers.

Will I be better off transferring the title to one of my parents ? Any help is appreciated please, thank you!

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[Nugester]

You'll be fine. It's based off your income/tax returns. I have something similar and am able to receive max loans from Uncle Sam.

 

[Doc.Ope]

You'll be fine. It's based off your income/tax returns. I have something similar and am able to receive max loans from Uncle Sam.

Hey! Thank you so much for responding. Yeah, I figured it wouldn't affect loans. Just wasn't sure how it'll affect scholarships and grants, I'm guessing schools don't care unless you have multiple properties.

 

[KnightDoc]

Hey! Thank you so much for responding. Yeah, I figured it wouldn't affect loans. Just wasn't sure how it'll affect scholarships and grants, I'm guessing schools don't care unless you have multiple properties.

If it's anything like UG, the equity in the house will kill you, and, since schools look at your parents' assets, it won't matter whose name they are in. After making some allowances for retirement assets, need based grants generally don't go to people with substantial assets (stocks, bonds, cash, businesses, real estate, etc.). A $500,000 house with a $500,000 mortgage won't hurt you whereas a $500,000 house with no mortgage will, since you can borrow against it to raise money versus needing a grant, while a genuinely poor person cannot. Hence you don't have "need."

 

[bpinyourarea]

If it's anything like UG, the equity in the house will kill you, and, since schools look at your parents' assets, it won't matter whose name they are in. After making some allowances for retirement assets, need based grants generally don't go to people with substantial assets (stocks, bonds, cash, businesses, real estate, etc.). A $500,000 house with a $500,000 mortgage won't hurt you whereas a $500,000 house with no mortgage will, since you can borrow against it to raise money versus needing a grant, while a genuinely poor person cannot. Hence you don't have "need."

Most financial aid offices don’t consider your first & only house to be an asset, regardless of the mortgage on it, because you have to live somewhere. Since most medical students are adults, I think it’s reasonable for someone to live and own a house that is separate from their parents.

However, in this specific instance, I don’t know if this house would be considered OP’s place of residence or if it’s a second property since his parents also signed.

 

[KnightDoc]

Most financial aid offices don’t consider your first & only house to be an asset, regardless of the mortgage on it, because you have to live somewhere. Since most medical students are adults, I think it’s reasonable for someone to live and own a house that is separate from their parents.

However, in this specific instance, I don’t know if this house would be considered OP’s place of residence or if it’s a second property since his parents also signed.

If you say so, but for UG schools certainly do consider home equity as an asset that can be borrowed against. Yes, everyone has to live somewhere, but not necessarily rent free while sitting on hundreds of thousands of dollars in equity while simultaneously crying poverty and asking for grants.

Between someone who owns one and only house, free and clear and someone else who owns nothing, rents, and has an equivalent amount of money in the bank (hundreds of thousands of dollars), why would you think the former is needy and the latter isn't? They both have the exact same net worth. The former can convert his equity into cash with a mortgage, and the latter can convert his cash into equity by buying a house. Do you honestly think fin aid offices don't understand this???