What is 'Home Equity'

Home equity 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.

BREAKING DOWN 'Home Equity'

Home equity represents one of the largest sources of net worth for most investors. Home equity can be borrowed against through a home equity loan or home equity line of credit (HELOC).

RELATED TERMS
  1. Mortgage Equity Withdrawal - MEW

    The removal of equity from the value of a home through the use ...
  2. Home Debtor

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  4. Equity

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  5. Equity Takeout

    Taking money out of a property to use for a variety of purposes. ...
  6. Mortgage

    A debt instrument, secured by the collateral of specified real ...
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RELATED FAQS
  1. What are the Differences Between a Home Equity Line of Credit (HELOC) and a Home ...

    Learn the differences between a home equity loan and a home equity line of credit, and find out how to select the one that ... Read Answer >>
  2. How do I calculate how much home equity I have?

    Find out how to calculate the home equity in your home, your home equity percentage and the loan-to-value, or LTV, based ... Read Answer >>
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