Home Equity

AAA

DEFINITION of 'Home Equity'

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.

INVESTOPEDIA EXPLAINS '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. All-In-One Mortgage

    A mortgage loan that combines the features of a checking account, ...
  2. Homeowner Affordability And Stability ...

    A program rolled out in 2009 in an attempt to stabilize the U.S. ...
  3. Home-Equity Loan

    A consumer loan secured by a second mortgage, allowing home owners ...
  4. House Poor

    A situation that describes a person who spends a large proportion ...
  5. 100% Mortgage

    A mortgage loan in which the borrower receives a loan amount ...
  6. Negative Equity

    When the value of an asset falls below the outstanding balance ...
Related Articles
  1. Home & Auto

    Measuring The Benefits Of Home Ownership

    Price appreciation is the biggest factor, but it's not the only thing to consider.
  2. Home & Auto

    The Truth About Real Estate Prices

    Historical housing price data suggests ongoing increases in housing prices, but these numbers don't tell the whole truth.
  3. Budgeting

    Mortgages: How Much Can You Afford?

    Answering this means number-crunching as well as factoring in other considerations and expenses.
  4. Home & Auto

    The Benefits Of Mortgage Repayment

    Buying a home may be the biggest debt you'll ever incur. Learn why you should retire it sooner, rather than later.
  5. Options & Futures

    Make A Risk-Based Mortgage Decision

    Find out how to choose which mortgage style is right for you.
  6. Home & Auto

    When (And When Not) To Refinance Your Mortgage

    There are both good and bad reasons to refinance. Learn more about both here.
  7. Home & Auto

    Reverse Mortgage Pitfalls

    Before tapping your home equity, find out what can go wrong.
  8. Options & Futures

    Home-Equity Loans: The Costs

    Learn the factors to consider when comparing the different programs offered by various lenders.
  9. Home & Auto

    Equity Stripping Leaves Creditors Empty-Handed

    Add additional debt to your real estate assets to keep the creditors at bay.
  10. Investing Basics

    Subprime Lending: Helping Hand Or Underhanded?

    These loans can spell disaster for borrowers, but that doesn't mean they should be condemned.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center