What Is Equity?
Equity is the value YOU own in property such as a house. It’s the difference between what’s OWED and what the property is WORTH in the current market.
Let’s say you have a house worth $300,000 today and you owe the bank $200,000. Your equity would be $100,000.
If the house is valued at $500,000 in five years, and you still owe $150,000 your equity will be $350,000.
Equity grows if the property value goes up or if the amount owed goes down.
Equity in a home can be used as collateral for loans but a house is not a piggy bank. Home equity can become a key financial asset over time; treat it wisely.
So if you’re thinking about buying or selling a home and have any questions, feel free to contact us!
