Q. I want to improve my child's chance of getting financial aid, will HELOC help?
A. Not likely.
If you open a HELOC but don't use it, it won't matter at all for FAFAA. If you actually take money out of HELOC but not using it (e.g. put into a bank account), it will increase your reportable assets and hurt your chance of getting financial aid.
In one scenario a HELOC might help, that is you have a sizable saving balance, it will be your assets and hurt the financial aid chance. You can use that asset to pay down mortgage, then open a HELOC for emergency use. This will help your chance of getting financial aid, but of course comes with risks if your home value decreases, you lose your job, etc.
A. Not likely.
If you open a HELOC but don't use it, it won't matter at all for FAFAA. If you actually take money out of HELOC but not using it (e.g. put into a bank account), it will increase your reportable assets and hurt your chance of getting financial aid.
In one scenario a HELOC might help, that is you have a sizable saving balance, it will be your assets and hurt the financial aid chance. You can use that asset to pay down mortgage, then open a HELOC for emergency use. This will help your chance of getting financial aid, but of course comes with risks if your home value decreases, you lose your job, etc.
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