Home equity is a term you’ll often hear in real estate, but what does it actually mean? Simply put, home equity is the portion of your home’s value that you truly own. It’s the difference between the market value of your home and the amount you still owe on your mortgage.
Here’s an example: Let’s say your home is worth $300,000, and you still owe $200,000 on your mortgage. Your home equity would be $100,000. As you make mortgage payments and your home’s value increases over time, your equity grows.
Building home equity is one of the biggest financial benefits of homeownership. It’s like a savings account that you can tap into for major expenses, such as home improvements, paying off debt, or funding a large purchase. You can access your equity through options like home equity loans, lines of credit, or even by selling your home.
Want to learn how to maximize your home’s equity? Reach out to a trusted real estate professional for guidance!