0
Home equity is the difference between the value of your home and the amount you owe on your mortgage(s).
Example: If your home is worth $200,000 and you owe $150,000 on your mortgage, your home equity is valued at $50,000. The value of your home equity will move up and down as the value of your home changes and as you pay your mortgage down. If your home is worth $205,000 next year and your mortgage balance is $145,000 next your, your home equity would be $60,000. Your home equity would have increased by $10,000.
Home equity is a part of your combined net worth, which includes the value of items such as 401K’s, stocks, mututal funds, cash deposits, etc. Net worth is the difference between the total of “everything” you OWN and “the total of everything” you OWE.
What is the definition of home equity?