Sorry, Kids. You Can't Go to College. We Bought a House.
June 19th, 2007 categories: Mortgage, Real Estate, Real Estate Tips, Sacramento
Today, Sacramento Real Estate Voice is pleased to announce that we have as our guest Brian Brady, “The Most Opinionated Mortgage Broker” who worked on Wall Street and has 13 years mortgage banking experience with 20 years of financial service experience as well as an avid writer and featured speaker. Brian is the Managing Director of World Wide Credit Corporation and has a wealth of information. We hope to have Brian guest frequently on Sacramento Real Estate Voice and lend HIS voice on financial matters. Now, here’s Brian…
Well, it’s June and the kids are out of school and you’re looking for a new home. You ask Gena to find you your dream home in the Elk Grove Unified School District. You’re extremely proud because your daughter will start Harriett Eddy Middle School in September. You’re oldest, just a baby girl in your eyes, is growing up. Soon, she’ll be in college.
WHAT? COLLEGE?? HOW THE HECK WILL YOU PAY FOR COLLEGE???
This is where you are in luck; you know Gena. Gena knows that financing a home is even more complicated now than ever before. There are tax implications to consider, funding college for your children, and positioning your assets for retirement. In fact, financing a home is more than just getting a “low rate with no points”. You don’t need a loan salesperson, you need a Mortgage Wealth Planner. A Mortgage Wealth Planner won’t let you just “plunk all that equity” from the sale of your old home on the new home. Mortgage Wealth Planners know that your mortgage is an integral part of a financial plan. We work with a tax adviser to craft the proper loan solution for you.
We start with the financial goals in mind before recommending a house loan. We recognize that a house, if financed properly upfront, can provide for your children’s education. Now, I know most people say that they’ll get a home equity loan when it comes time for college; that might not be tax-deductible.
Let’s start with the goal of educating your daughter first, then looking at a loan. Let’s assume your daughter will attend either UC-Santa Barbara (lucky girl) or University of Southern California. The former would cost about $90,000 in 2007 dollars, the latter would cost about $200,000 in 2007 dollars.
OUCH! You ain’t got the money- your daughter won’t go to college!
Well, hold on..don’t panic yet.
Instead of putting 50% down on the new home, we might recommend that you increase the loan amount by $50,000 to invest into a 529 savings plan with your financial adviser. Why? Well, the after-tax interest rate of the mortgage may be substantially less than the after-tax return your financial adviser can find you. As that extra $50,000 grows, you may have the lion’s share of your daughter’s educational costs covered by the time she tries out for the college cheerleading squad.
You can’t afford it? Well show you how to maintain the Acquisition Indebtedness with an interest-only loan to maximize your tax deductions during your peak expense years. That way you keep more of your hard-earned money.
You can own the home of your dreams AND send your daughter to college.
Brian Brady is a Mortgage & Wealth Planner with World Wide Credit Corporation in San Diego.
Thank you Brian…where were you when I had young kids? I sure could have pick up a few pointers from you.
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Gena.. smart girl to get Brian to do a guest blog.. He really knows his stuff..
Very informative Gena and Brian. I’m going to forward this to my sister!
Glad that you found the information helpful, moni. Brian always has great tips and advice.
Kaye, yes Brian is a popular guest speaker and was so glad that he had time to join us on Sacramento Real Estate Voice and share such helpful information. Hopefully, Brian Brady will make this a regular monthly visit.
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