The definition of Home Equity is what the house is worth if it were to be put on the market today. Your share of this equity is equal to how much you owe on the house. Typically, in order to purchase a home, many people have to take out a loan. Thus, until you have paid the house off completely, your equity will not be 100%. The best way to figure out your share is to subtract the amount you owe from the value of the home. This is called separating the amortization, or how much you’ve paid, from the home’s appraisal, or estimated value.
For example, if you still owe $100,000 on a home appraised at a value of $240,000, then your equity balance is $140,000, or roughly 58% of the total value of the home. The greater this percentage, the better, as it allows you to borrow more and increases your total net worth.
We are Frisco, TX home specialists. If you have any questions about real estate in Frisco, or any neighboring DFW communities, please fill out our contact form, or call 469-556-2393 for assistance.
We are Frisco, TX home specialists. If you have any questions about real estate in Frisco, or any neighboring DFW communities, please fill out our contact form, or call 469-556-2393 for assistance.
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