All Forum Posts by: Dina Schmid

@Craig Jones. Welcome to the wild world of college aid! IMO it never works out the way you think it should.

When it comes to FAFSA, it's important to note that it's primary purpose is to determine eligibility for Pell grants and subsidized loans. You also need to fill one out if you want an unsubsidized student loan and/or a Parent Plus loan. While the form generates an EFC, it's no guarantee that the school your student wants to go to will have that as the actual amount you will pay.

I post this not as a financial expert, but as someone who currently has two children in college and has had at least one in college going on 8 years. Over those years I've learned a lot - often the hard way.

There are things you can do to lower your EFC on the FAFSA. Getting rid of cash (and paying off your mortgage instead) can help. My guess is anyone reading this on this forum is not going to qualify for a Pell grant no matter what moves they make.

Most schools that promise to meet full financial need will use the CSS Profile instead of the FAFSA. IME, this is a whole other system that seems to screw over families that are low income but high net worth. (At the time I filled out my first FAFSA and CSS Profile, we weren't really *that* high net worth either. We'd just always lived below our means and saved and invested.) Each college will have their own formula using this which is why we got EFCs that varied by tens of thousands of dollars when my oldest got into a variety of school including ones at the top of the rankings. I was shocked at the numbers we were seeing. One school wanted us to put 45% of my husband's income towards the COA. (Cost of attendance.) 

I had conversations with financial aid officers at several different schools and learned these hard truths:

- They don't care how many children you have. You are expected to be able to contribute the max (including the total in all 529s) to child #1's education. You are expected to just deal with the others when you reach that bridge.
- Equity in your house is considered fair game. I had one FA officer flat out tell me, "We know you can take a HELOC to cover the tuition."
- Any amount you've been contributing to retirement is considered an amount that should go towards tuition. They add that back in to your income on the CSS Profile. (I would suspect that your depreciation losses would be treated the same way as you could always sell that business off.)
- Some FA officers think the solution is to sell off any additional RE you own and use that money to pay tuition.
- There is a penalty added in for having a non-working parent. The expectation is that that parent should be getting a job to contribute to paying for tuition. (The FA officer I talked to with this one didn't care that I was still homeschooling my youngest at the time.)

My recommendation is to look and see if the school offers any type of financial aid estimator and use that to see what you might be looking at for a tuition bill in the future. Some schools will do an official pre-read of financial aid for you. (Saved us the application fee at one school!) The schools that offer this will be using more complex formulas that will take into accout REI. ANd if you find yourself in a position where you aren't going to get financial aid because of high assets, repeat "This is a good problem to have. Many people wish they had this problem" over and over and over again until you brainwash yourself into believing it!

Thanks for the support @Christina B. Right now I'm not in a good place to make any decisions, so we're just continuing with the same PM and will keep all current bookings. (There's no one there today and a guest will check in tomorrow so that is fortunate.) We were told that they can toggle off the pet friendly switch if we say so, but we'd have to honor it for bookings already made. 

There was so much that went on during the process that didn't have to be so stressful. At the end it got even worse. The seller is also the bulider and controls the HOA. Shortly before closing he called me, asked to buy me out of the contract, reminded me of his control over the HOA and stated that he hoped we wouldn't regret purchasing the cabin in the future. My realtor said she would pursue seller for breach of contract to get her commission. Every part of my gut instinct told me to run away, but my husband wanted to stay the course and we were both slightly concerned that we could be liable for the loss of commission. Then on the morning we were supposed to close, the closing attorney told us that seller said he wouldn't sign unless we were charged the full HOA fee for 2025. Closing documents had prorated it, as is the norm. So we had to write a check to him/HOA for $62 in order to proceed. Seller was supposed to close remotely and everything was to be done by 10am. At 4:30pm we learned seller had signed some, but not all documents. WIth our contract expiring that night, we were left in a legal limbo that was a first for everyone involved. It was resolved the next day, but by then I wanted out.

I hope to put all this behind me and enjoy the cabin some day. Might be a while.

After a million obstacles thrown up by the seller (including transferring the property out of his name and into an LLC the business day before we were to close) we finally crossed the finish line yesterday afternoon and own the cabin.

Since we don't have the TIE I am signing with a PM company today. We knew we wanted to sign at least to start, but after the past 8+ days, I want very little to do with the cabin. The seller's actions and the phone call he made to me have me fearing future retribution and at one point I called the closing attorney to ask what my options were and if termination was possible. As of now we have no plans to go to the cabin in the next two months. I think I need that time to cool off.

The 7 streams myth has been repeatedly debunked. This study shows that it's actually 3 streams: https://www.entrepreneur.com/leadership/grow-your-wealth-wit...

There's a lot of misconception regarding who is and isn't getting to $1M (which isn't even that much in today's money.) I highly recommend reading Dave Ramsey's Study on Millionaires. This was a study done by surveying 10,000 millionaires that were considered to be representative of the US population. The majority of them got to $1M by slow and steady investing (401K) and living under their means and are the "millionaire next door" type. 

High income earners don't always have high net wealth as they feel pressured to spend and live a certain lifetyle. Teachers are in the top 5 professions most likely to be millionaires. No one expects them to go on lavish vacations or drive fancy sports cars so they can quietly invest instead.

Thanks @James Wilcox. Seller has indicated he'll sign something regarding the easement, but he's not willing to proactively do that himself. (He keeps indicating that he'd rather we just use his title agent.) I've got a call into the lender to see if their title agent can write it up. I really don't think we should have to pay to get an attorney involved in this.

Appreciate you both (@Patrick Roberts and @Chris Seveney ) chiming in. I went back through the development covenants that were written in Phase I of the development. That one does mention non-exclusive easement for access to homes. Unfortunately it calls out the street names specifically, so our street isn't mentioned. I forwarded those to the lender and asked if getting the developer to amend the covenants to include our street would suffice. Hopefully that will fix things. If not, then it looks like we'll have to make the decision of whether to get an attorney to write something up - or back out as the phrase "throwing good money after bad" keeps popping into my mind. (We already had to spend $$$ on a PE to get the builder to make a foundation fix.)

@Patrick Roberts Really appreciate you taking the time to respond. It prompted me to do more digging including reaching out to the seller/developer directly. I asked for the paperwork regarding the road and easement and all I got was the plat - which I already had. He claims that state law guarantees us access, but neither I nor my AI assistants could find anything guaranteeing us access without a permanent easement. There was no paperwork of an easement provided. 

Early on, seller had requested we use his title agency and is still pushing us to use his title agency, which raises even more questions. I guess if we want to close we go with his agency (which I'm guessing will look the other way) or we do this right.

We've been under contract for close to 75 days and still don't have a closing date. Ready to jump ship on our lender if there's someone else out there that can get us to close by March 16th.

Details:
Powell County KY 
35% down
Excellent credit (although we've had two hard pulls recently - by the same lender)
Property appraised for 3% over purchase price
All paperwork (tax info, pay stubs, bank statements, etc.) in a folder on my computer and ready to submit

Hurdles we've been dealing with:
- Unresolved mortgage on previous owner (we've been told it's been resolved)
- Small judgement lien against previous owner (<$1000) can not be resolved. Entity declared bankruptcy and didn't list the lien in their filings. We had already requested owner's title insurance before this was even discovered.
- Property is on a private road currently owned by an LLC/Landowner's association. This last one is really holding things up. We're the first build in the development and the builder is going to turn it over to an HOA when the development is finished.
We know there's an easement but the lender wants reassurance that we have permanent and unrestricted access. I'm trying to get something from the developer but honestly don't know what I could give them at this point.

I'm also okay with advice that we should walk away if in looking at this think it's too risky. We might be naive, but we don't see huge risks.  DM if you're a traditional lender who can make this happen (without outrageous fees of course!).

For anyone following, we still have not closed. Just signed a second contract extension. Title work had been delayed due to the original contract having a lot # and not an actual address. Then we found out we had the wrong street name, city, and zip. Then they found an unresolved mortgage (since resolved) and a judgment lien on the previous owner (still not resolved). 

It is frustrating because of how much time and money we've already invested. (Getting a PE involved in requesting and certifying foundation work wasn't cheap!) We still want the place and are cautiously optimistic, but I started looking at what else is out there just in case.

 That's pretty much my thinking, but I can see the case for wanting a property to be closer to fully booked because of FOMO. The more popular a place is, the more people want to stay there. If you can drive up the number of reviews (hopefully all positive) then you can also probably get a bump in the algorithms.