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Forum LockedGetting Student Loans (unusual, please read!)

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jords View Drop Down
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    Posted: 12/March/2014 at 3:08am
Perhaps I'm not in such an unusual position as I think I am. But here it goes;

My common-law partner and I are currently 22, and 20, respectively. We purchased a house together last year, which means a mortgage (current balance is now ~$148,000), and an unsecured line of credit (balance ~$10,000) for the down payment and improvements. We are planning to have the LOC paid off in a years time, but keep the house ( which means keep the mortgage, obviously). Payments on the mortgage are less than rent in our city, and we do rent out a portion of the house, which actually pays the entire mortgage payment ( however, we DO NOT claim this income).

My question is can I still get government (or bank) student loans when we have a mortgage? Both of our education is 4 years , about. $25,000 total tuition each. Can the government/bank take our house if we stopped paying due to job loss or something? Would we go to apply and they'd just tell us to sell our house and use the cash we'd then have to pay outright for our educations? I'm at a loss and every time I try to talk to the banks here, they want me to fill in applications and ignore my questions.

Any help would be much appreciated!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 12/March/2014 at 10:48am
Well,not claiming the income ti tax fraud. You need to declare ALL of your income on a student loan application.

There used to be rules that you had to contribute a portion of your assets, but not likely your home. Check with your financial aid office or call the people at student loans, but make sure you delcare all of your income.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote csmith73 Quote  Post ReplyReply Direct Link To This Post Posted: 12/March/2014 at 8:24pm
Now this was years ago, but when my spouse applied for student loans he was denied, because he had assets of over 25k. 
This asset, was a leased van, and it was clearly indicated it was a lease.
 
Last I checked a lease was basically like rent, you don't own it but OSAP said he was denied because he had assets he could dispose of and use that money to pay for his education.
Chris
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Post Options Post Options   Thanks (0) Thanks(0)   Quote jords Quote  Post ReplyReply Direct Link To This Post Posted: 13/March/2014 at 11:11pm
Tax fraud? Yikes! When I took all my stuff to the accountant a couple weeks ago for my 2013 tax return, I brought all rental income receipts and expenses from that (utility bills, maintenance for the suite, etc) but he told me not to worry about it. I received my notice of assessment from the CRA last week and my taxable income did not include the rent I got last year, so I assumed we didn't claim the rental income. I guess my original post didn't at all mention that stuff (didn't think it was relevant to my question). I've gone to this accountant for my tax returns ever since my first return, so I trust him. But after hearing the words tax fraud, I think I'm gunna pay him a visit tomorrow morning and find out what exactly is going on with that then! Thanks for the heads up! Last thing I wanna do is go to jail! Thanks!

I contacted CanLearn, and they said my house wouldn't be considered an asset, since I live there, but that the mortgage payments would be counted in my debt to income ratio (as it would be with someone paying rent). But they also said the mortgage would be counted under total debts when it comes to approving me for student loans. So I asked them if this meant I'm basically screwed since they'll see I have a $148,000 loan, and not count my house as even a $140,000 asset to counter-act with the loan. They said that while what I say is TRUE, I shouldn't be screwed over so long as I can afford the student loan payments, and have made all mortgage payments on time. The mortgage becomes a factor as to how much debt I am carrying, but they see a mortgage as "good debt" even when considering approval for government student loans. They also said the same as you (admin) that I need to claim that rental income, and with basic bills (the cable, water, power, etc) it should more than offset the taxes owed on the income, but the rental income then tells them I make more money than just my pay cheques, and it should only help to get me approved for student loans, as I'd have extra cash available to make the payments on all the debts.


I just thought I'd post all the information I've learnt by talking with CanLearn, in the hopes this eventually gets archived and helps someone else out, should they be in the same situation one day and are trying to search to find our more information. I do apologize for steering away from the boards primary purpose!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 14/March/2014 at 8:25am
Thanks for posting this info...

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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 14/March/2014 at 7:03pm
Might need a new accountant!  Your rental income likely should be declared, but you might also be then able to write off a portion of your mortgage interest....  Best to talk to a tax accountant about that though....
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