How To Send Your Kid To College By Using REAL ESTATE, But Not Your Home!
Paying for College!
Have you ever thought about how are you going to pay for your kids college. Or better yet when to start saving for your son, or daughter's college education. Or maybe if you will be able to pay for your child's higher education.
College is a good thing for people. The thing is that most people need to understand is that just because you go to school doesn't necessary equate in to having a good paying job or a prominent position in life. You have to work hard and achieve that. Its not going to be given.
But lets talk about college tuition.
There's no escaping the fact that college costs are rising. According to recently released reports from the College Board, most students and their families can expect to pay, on average, from $95 to $1,404 more than last year for this year's tuition and fees, depending on the type of college.
But there is good news. There is more than $130 billion in financial aid available. And, despite all of these college cost increases, a college education remains an affordable choice for most families. Question? Do you want to be in debt for you kids college, or yet clip their wings with student loan debt before they even begin to fly?
Sticker Price vs. Affordability Factor -
Although some of the college price tags you hear about can be quite daunting—$30,000 or more for yearly tuition and fees—most colleges are more affordable than you might think. For example, did you know that about 56 percent of students attend four-year schools with annual tuition and fees below $9,000? After grants are taken into consideration, the net price the average undergraduate pays for a college education is significantly lower than the published tuition and fees. And remember, other forms of financial aid will further reduce the amount your family will actually pay.
Average College Costs 2007-08 But Did You Know That... Private four-year $23,712 (up 6.3 percent from last year)
Public four-year $6,185 (up 6.6 percent from last year) About 56 percent of students enrolled at four-year colleges or universities attend institutions that charge tuition and fees of less than $9,000 per year.
43 percent of full-time students enrolled in public four-year colleges and universities attend institutions that charge tuition and fees between $3,000 and $6,000.
While private four-year institutions have a much wider range of tuition and fee charges, only about 6 percent of all students attend colleges with tuition and fees totaling $33,000 or higher per year.
Public two-year $2,361 (up 4.2 percent from last year) 22 percent of all full-time students attend public two-year colleges.
For full-time dependent students at public two-year colleges, net tuition and fees are no more than 2% of the family income.
Students will pay, on average, from $371 to $406 more than last year for this year's room and board, depending on the type of college.
The average surcharge for full-time out-of-state students at public four-year institutions is $10,455. More than $130 billion in financial aid is available to students and their families.
About two-thirds of all full-time undergraduate students receive grant aid. In 2007-08, estimated aid in the form of grants and tax benefits averaged about $2,040 per student at public two-year colleges, about $3,600 at public four-year colleges, and about $9,300 per student at private four-year colleges.
Consider College an Investment. In other words, whatever sacrifices you make for your college education in the short term are more than repaid in the long term.
Note: Cost and aid figures are from the College Board's Trends in College Pricing 2007, Trends in Student Aid 2007, and Education Pays 2007.
But how about if you could pay for your kids college without having to take a out a loan and going 5 to 7 to 17 years in debt. It's simple, and I'll put in two words - REAL ESTATE - I could jazz you with fancy words, and create a chart that is complicated to read, but I feel the simpler I can show you how the better. I'm going to show you a remarkable methods of doing this.
This is something that I like to call buy it and forget about it. Buy it and forget about is focused on purchasing a 2nd house and putting it under property management until it's around time for college. You'll need a real estate professional to help you.
1st step: finding the right real estate agent -
This needs to be done with care because the right agent makes all the difference in the world. When searching for a agent you want to find one that;s not too busy or to big. On the other hand you don't want someone who is too new either. Look for someone who has been in the business for a while but is not over busy. I recommend starting with a independent real estate company.
step 2: get prequalified for a loan -
In this step most people are tempted to go to their local credit union, or bank and ask for a mortgage loan. Big mistake. Most banks or credit union do off site lending which means that you'll be talking to some one over the phone in another state or district.They are not sensitive to the local market. I suggest using a mortgage company such as a local Countrywide or a independent mortgage company. The type of loan you will need to get is a conventional loan that requires anywhere from a 5% down to 10% down. Most mortgage companies will allow you to pay 3% down if you move into the new house. This may not be something you want to consider and it's okay. While your with the mortgage broker I suggest 2 things to ask and to write down. 1 how much is your closing cost going to be 2 what is you interest rate make sure it's fixed and NOT adjustable.
step 3: Find a house -
When looking for your 2nd house you want to focus in the middle class suburban neighborhoods were you have the working class types. Studies show that most people are prone to renting in this type of area and are usually rent on ave from 1 to 6 years during their renting cycle.
step 4: The offer -
when you are making an offer on the property this is when your Real Estate agent counts. Make the offer and I suggest making a full price offer on the property that your going to buy. Why? Because it makes the deal go through much more smoothly and you don't want to piss around dealy dabbling about a house price for $75,000 or $81,900 there is no point to that type of stress an appraiser will come sent by YOUR mortgage company and will give an accurate value of the house. Make the offer but find out how much you closing cost is going to be with the loan company and see hou much you need to put down. Once you have that number and ask for that amount in closing cost.
Step 5: Property Management -
After you have placed an offer on the home your going to purchase the next thing is to contact a competent property management company and let them know that you are looking to close on a house in the next 30 days and that you want to bring that house under property management. This foresight allows you to breath in the stress free zone. 75% of the time the PM company already has someone who is looking to rent in that area, and by contacting them at this stage of the game you alert them ahead of time and get a possible tenant lined up before you have closed on the house. Not to mention all of the necessary paper work done way ahead of time. You do NOT want to wait until the last min. to do this step.
Step 6: Close The Deal Bring Under PM -
Once you close the deal depending on the day that you close your first payment is not due to the following month. So if it's January your first payment is not due until March. As long as step 5 has be done correctly when you close you should already have all of your paper work done way before the closing with the PM company and maybe even a tenant in the new property
Step 7: Pay for College -
well there is 2 ways of doing this 1. when the time comes to send you kid or kids to college you can sell your home. I like the idea of selling, and taking the equity that's built up and pay for college in full. The second way is a tax free way of doing this and that is to do a refinance and pull the amount need for college out of your home while the tenant is still living there and making the mortgage payments. I like this way better because it leaves the uncle Tax Man out of your pocket, and if you ever need access to lots of cash your house becomes your ATM.
A awesome free website that you can find homes that are government foreclosures is www.ocwen.com and to find local listings of houses with out the paying for a website membership is www.realtor.com