What is Home Equity?
Home equity is the difference between the appraised value of your home and any outstanding mortgage and loan balances. In most cases, home equity builds over time as you pay down mortgage balances or add value to your home. If you owe $150,000 on your mortgage loan and your home is worth $200,000, you have $50,000 of equity in your home.
Why Home Equity?
Your home equity can be a useful tool when you need to cover large expenses associated with home improvement, debt consolidation, college tuition, or other types of major expenses. It is an important asset for homeowners, since it can be used to borrow home equity loans or lines of credit. Because you can borrow against the value of your home, a home equity loan may also be easier to qualify for than other loans since the loan is secured by your house.
The top questions people ask us
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Note: These are general Home Equity FAQs. We also suggest you read the FAQs for the Debt Solutions company we work with.