Equity Vs. Home Value
Home value refers to how much a house would sell for on the open market. Home equity refers to how much of the value you do not owe in loans on the house.
Other People Are Reading
-
Factors Affecting Home Value
-
The value of your home is affected by a variety of factors including the size of the home, the neighborhood, and the proximity to jobs, schools and entertainment.
Equity Calculation
-
To find your equity, subtract the amount of money you owe on loans for your home from the value of your home. For example, if your home were worth $340,000 and you owed $230,000 on your mortgage, you would have $110,000 in equity.
-
Private Mortgage Insurance
-
You are able to request that your private mortgage insurance premiums be canceled after you reach 80 percent equity in your home. Lenders must cancel it when you reach 82 percent.
Borrowing Money
-
Most lenders cap the amount of money you can borrow at 80 percent of your home's value, but some will go as high as 125 percent under strong economic conditions. If you have loans against your home, your equity decreases, limiting the amount you can borrow in the future.
Ways to Use Home Equity
-
You can use the equity in your home to borrow against with a cash-out refinance, home-equity loan or home-equity line of credit.
-
