A better idea would have been for Lilly’s mother to buy a single-family rental property. The income from the rental property could have been used to save for Lilly’s college. Even better, Lilly’s mother could even give this home to Lilly when she graduates from college. Upon graduation, Lilly would have two choices:
1. She could keep the home as a rental property collecting monthly income for life
2. She could move into the home herself.
Either way, Lilly would be far better off if her mother obtained a loan from Quicken to buy a nice rental property instead of refinancing her existing mortgage. She would have a gift from her mother that would help pay for college and also provide for her after college.