Definition
The portion of your home’s value that you actually own, calculated by subtracting your mortgage balance from the home’s market value.
What to consider
- Track your mortgage balance versus your home’s market value.
- Building equity can open doors for future borrowing.
- Regular payments help increase your ownership over time.
Real world scenarios
- After years of steady mortgage payments, Serena calculates she has built up $50,000 in home equity, giving her borrowing power for renovations.
- Rising real estate prices boost Walter’s equity even though he hasn’t finished paying off his loan.
- Tanya checks her current mortgage balance and compares it to the property’s market value, measuring how equity has grown.
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Real Estate & Homeownership
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