Home equity loan for education
Should I take out a home equity loan to help my child pay for school? Will I pay the same rate as my original mortgage at 2.5%?
Terry Says
No, no, no!!!
Keep your original mortgage and don’t touch it!
A home equity loan will likely have a floating rate that could be as high as 7%. And it can trap you if they set it up as an interest-only loan with a balloon payment in 5 years or so.
If you didn’t save for college, you should file for Federal student aid, hunt for scholarships, and choose a school that might offer a tuition discount. Your high school guidance officer can help in this process. But to learn more, start here: https://studentaid.gov/
And here’s another great site — Finaid.org — that will help you understand the process. Start now!!
