top of page
Equity

Equity

A term commonly used in the world of real estate and refers to the portion of a property's value that is free and clear of any liens or mortgages. Essentially, it represents the homeowner's ownership stake in the property. For example, if a homeowner purchases a property for $300,000 with a mortgage of $200,000, their equity would be $100,000. This means that if they were to sell the property for $350,000, they would walk away with $150,000 ($100,000 in equity plus the $50,000 profit from the sale). Equity can also be used as collateral for a loan or line of credit, allowing homeowners to tap into the value of their property without selling it. Overall, understanding how equity works is an important aspect of being a homeowner or real estate investor, as it can have a significant impact on one's financial situation and long-term wealth-building strategy.
bottom of page