Primary residence to rental property minimizing gross income

[Kate Gofman]

Hi everyone,

I plan to rent my house which has been my primary residence for 5 years, and move in with my fiancé .

I am a single mother with 15 year old twin daughters. I don't have any savings.

Of course, I worry about college costs in 3 years when my girls finish high school. My fiancé and I are not marrying now because he has good income and I will not get any college financial aid if I marry him. He is a widower and has his own two sons in college, so I wouldn't want to use his money for my children's college education

I have some unclear financial matters with this rental plan and need some advice.

1. The best option for me, in terms of getting generous private college financial aid, not to have any home equity at all. I could transfer deed and title to my fiancé but I have a $240,000 mortgage on the house, which is not transferable.
I know it's not a good idea because the mortgage company can find out about it. Besides, for college aid, it may look strange that I pay mortgage but don't own the house.

My fiancé could also buy the house from me, but he doesn't have enough money for a 20% down payment. He just bought his primary residence where we will live together.

2. Another option for me is to remain the owner of the house and rent it.
First, it will decrease private college financial aid because of the home equity. Second, it will increase my gross income and my ex-husband can request to have child support recalculated, according to our divorce agreement. I don't want that either.

3. My friend suggested opening LLC for renting my house. She says this way I can regulate my gross income increase myself at the level that does not cause child support recalculation.
I assume, this LLC option will require including LLC name on the house title, and refinancing the house.

I am very new to all this and pretty nervous because I don't know what to do.
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I will appreciate any professional advice on my situation.