Use Your Home to Send Your Child to Their Home Away from Home
We’ve all seen those stickers that proudly boast “University of Southern California Mom” or “Harvard Dad.” What they should really say is “Pay to the Order of USC” or “Sending the Checks to Harvard University.” If you’ve ever funded the college education of any loved one, then you know the feeling. While you may not have much of a say as to where your money goes, you can choose where that money comes from, and one option to help fund a college education is a home equity line of credit.
With a home equity line of credit, you have a certain amount of funds available to you (depending on how much equity you have in your home), but you do not have to receive them all at once, which is the case with a home equity loan. Instead, you can withdraw money whenever you need it and only pay interest on the amount you borrow. Also, the interest that you pay on a home equity line of credit is usually tax-deductible. Check with your tax advisor for more details.
If you are still a little uneasy with the thought of using your home equity to pay those hefty college bills, think of it as an investment. Using home equity to fund home improvement projects to increase a home’s fair market value is not uncommon. Similarly, funding your child’s education will theoretically help him or her in the job market, just as home improvements are intended to increase your property’s value in the real estate market.
Lawyer and President of Harvard University Derek Bok once said, “If you think education is expensive, try ignorance.” To ace the financial test that funding a college education may bring about, do your research and study up on the best mortgage rates so you can be assured that you are getting the best home equity line of credit available.
Source: Informa Research Services