Home Equity

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).

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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 >>
  3. How does the loan-to-value ratio affect my mortgage payments?

    Understand what the loan to value ratio is, how the ratio is calculated and learn how it has an impact on your mortgage payments ... Read Answer >>
  4. What are some examples of a good time to take out a home equity line of credit (HELOC)?

    Determine if a home equity line of credit (HELOC) is right for you by looking into the most common and ideal uses of these ... Read Answer >>
  5. What are the requirements to apply for a reverse mortgage loan?

    For homeowners of a certain age who wish to stay in their homes but are finding it costly, a reverse mortgage could be the ... Read Answer >>
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    A reverse mortgage can be a great way to increase retirement income. Does it work for everyone? What happens after a homeowner ... Read Answer >>
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