Home Equity

Home equity is the market value of a homeowner's unencumbered interest in their real property— the difference between the home's fair market value and the outstanding balance of all liens on the property. The property's equity increases as the debtor makes payments against the mortgage balance, and/or as the property value appreciates. In economics, home equity is sometimes called real property value. 

It is the value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments. This value is built up over time as the property owner pays off the mortgage and the market value of the property appreciates. In other words, it represents the portion of the home's value that the homeowner actually own.

Home equity can tell you several things about your financial situation, such as:

1. net worth: Home equity is a significant part of many people's net worth. It is one of the most valuable assets that most people own.

2. borrowing capacity: Your home equity can be used as collateral to secure a loan or line of credit, which can be useful if you need to borrow money.

3. investment: Homeowners can leverage their home equity to make other investments or to finance home improvement projects.

4. financial stability: A high amount of home equity can provide a buffer against financial hardship or a sudden drop in the value of your home.

In general, home equity can be a useful measure of your financial health and can provide insights into your overall financial situation.

Check out the Home Equity Calculator.

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