Affording Adoption
Year after year, families like yours find the money to finance their adoptions—even if they
are not wealthy, and even though they do have to come up with the money before they receive their tax credit. Read on to discover the possibilities.
Adoption is an expensive
endeavor. For those who wish to adopt but are hesitant because of
the expense involved, we hope you will find this information helpful.
Personal Savings
Consider dipping into your savings as an investment—an investment in the life of a child.
Grants/Loans
Click here
for a list of grants and loans that are available through a number of organizations on a limited basis. This may require more time and effort, but there are those who can help you investigate this option: National Adoption Foundation (Grants): 1.203.791.3811
National Adoption Foundation (Loans): 1.800.448.7061
Also, the National Endowment for Financial Education offers a free booklet entitled “How to Make Adoption an Affordable Option,” which you can request at the web site http://www.nefe.org/adoption/
Adoption loans and grants:
http://www.affordingadoption.com/loans.php
Employer Benefits
There’s no downside to an employer who willingly offers adoption benefits! Many are starting to include this in their employee benefits package. Call your Human Resources representative to inquire if this benefit is available through your employer. Just remember that up to $10,000 paid or reimbursed by your employer for qualifying adoption expenses may be excludable from your gross income.
Home Equity Loan or Low-Interest Loan
A home equity loan is a better option than a credit card because it’s structured to fit your needs. Plus, the interest rate is generally lower and usually tax deductible. These loans do take 4-6 weeks to process, so you may need to consider this early in your adoption planning. You can secure these loans through local or national banks, credit unions, and mortgage lenders.
Some banks offer low-interest loans or credit lines for adoptive parents. Call yours to inquire about their policy.
Family Loans or Gifts
Few people realize that family members may be excited to help you finance your adoption! They may offer a gift or a low interest or no interest loan. The rule of thumb is, you don’t know unless you ask.
Churches
Some churches have funds set aside specifically for meeting the financial needs of their congregations. Others may be willing to take a special offering designated for helping with adoption costs. Or perhaps they’d be willing to organize a fundraiser to help offset adoption expenses. Don’t overlook this possibility.
Members of the Christian faith can raise up to half of their adoption expenses through this non-profit organization. This new effort started when three adoptive dads saw the need to help families afford adoption. CAFA helps you craft a carefully-worded letter asking family or friends if they would like to help with adoption expenses. All donations are sent directly to CAFA, so givers have the opportunity to remain anonymous. Even better, loved ones will be more likely to contribute when they hear the entire gift is tax-deductible.
Refinancing a Mortgage
Use this option when mortgage rates are particularly low. It’s a “cash out” option on mortgage loans when the loan-to-value ratio allows. Just keep in mind that you will generally be responsible for mortgage costs on a new mortgage loan. Refinances aren’t recommended unless your loan rate is at least 1% lower than your current rate—and you plan on remaining in your home for 3-5 years.
Credit Card Payment
We accept MasterCard and Visa credit card payments. This can be a costly method of paying expenses
due to interest rates; be sure you know the terms and conditions up front.
Borrowing from a 401(k), Pension, or Insurance Policy
Think carefully and weigh the “cost” of lost income revenue with the costs of other finance options. And make sure you’re aware of any penalties or tax consequences that might apply to you. Your plan/policy administrator can answer any questions you may have.
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