What to do when the equity runs out?
It seems like just about everyone is having to adjust their financial plans these days. For some of you out there, the idea has always been to use the equity in your home in order to pay for your child's college education.
What happens when that equity runs dry because of tough economic times? That is what many of you are facing right now and as you can attest, this can be a very difficult situation to manage.
Don't fret, though, as there are some solutions to help you through a difficult time. You can go with a mortgage acceleration plan or you could even take advantage of low-cost government student loans.
Student Loans
• The government has made it very easy for individuals to get the financing they need for college. If you aren't comfortable using a mortgage acceleration plan to build equity more quickly, then you can certainly go with these loans to help bridge the gap.
• Subsidized Stafford Loans - These loans get help from the government, and you end up paying around 5.6 % interest over the long haul. The nice thing about this loan is that you won't be building up interest while your child is still in school and you will have some options in terms of differing interest payments when your child gets out. This basically gives you a nice four or five year window in which to help rectify your financial situation.
• Non-subsidized Stafford Loans - Similar to the subsidized version, this will have a slightly higher interest rate, but many of the same rules apply. The good thing about these loans is that individuals can qualify for them no matter what their credit looks like. Many parents are receiving financial aid packages that combine subsidized and unsubsidized Stafford loans to take the pressure off.
Mortgage Acceleration Program
One way to improve your financial standing and get back into a position where you can pay for your child's college education is to grow the equity in your home at a faster rate.
You can do this through what is known as a mortgage acceleration program.
This program is basically one that enables you to pay off your mortgage much more quickly without ever having to spend more money.
You basically knock out the extra interest that you would have otherwise had to pay, which makes it both cheaper and faster.
All in all, this difficult situation can be fixed if you have the ability to plan ahead.
It is difficult losing equity in your home because of the awful financial times, but you shouldn't fret. Using a mortgage acceleration program or government provided student loans, you can pay for your child (or children) to go to college without a whole lot of trouble. You should look into these options, because they are suited specifically for people in difficult situations and they act as as an alternative means to get your kids into college.
No comments:
Post a Comment