AEM Mortgage Minute with Deanna Daughhetee

Use it wisely and the flexibility and convenience of a HELOC, not to mention the tax deductibility, can be a powerful tool. Basically, the closing costs are minimal to open a home equity credit line, and access to the funds is easy. Simply write a check to access your available credit. It’s that simple. Now you have college tuition covered.

There’s also a growing school of thought that using a HELOC for education payments is a wise move if your college savings are coming at the expense of your retirement funding. Keep in mind that if you have many years between now and retirement, you can always earn more money to pay off a HELOC. Very few will lend you money to fund your retirement.

When you’re considering how to pay for your child’s college education, do plenty of research and find out how much you’ll need to save. If you can save plenty for retirement and save a little each month for the rapidly increasing tuition, you’re in good shape. But if you find that you need to borrow money, using your home’s equity might be the smart way to finance your child’s college years.