Home equity is the value of a homeowner's interest in their home. It is calculated as the difference between the home's current market value and the outstanding balance of any mortgages or liens on the property. For example, if your home is worth $300,000 and you owe $200,000 on your mortgage, your home’s equity is $100,000.
How Home Equity Builds Over Time
Home equity can increase over time if your property's value increases or as your mortgage balance is paid down. As you chip away at the principal on your mortgage, your equity grows. Making extra payments or larger-than-required payments can accelerate this process.
How to Use Home Equity
There are a couple of ways to leverage your home’s equity:
Benefits of Using Home Equity
Using your home’s equity comes with several advantages, including:
Whether you are planning home improvements, consolidating debt, or looking to invest in new ventures, your home’s equity can be an asset in achieving your financial goals.
Category: Home Ownership
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Home equity is the value of a homeowner's interest in their home. It is calculated as the difference between the home's current market value and the outstanding balance of any mortgages or liens on the property. For example, if your home is worth $300,000 and you owe $200,000 on your mortgage, your home’s equity is $100,000.