Things You'll Need:
- A Realtor friend or contact info.
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Step 1
The first step is to determine the current market value of your home. What price would a buyer pay for your home in a normal time on the market? You can determine value through paying for a licensed appraisal. You will need this if you want to refinance or take out a second mortgage. Usually a lender wants one done within the last 6 month. The cost for this in my area is about $300 to $500. It will vary some by region.
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Step 2
The second possibility to find accurate curent value is to ask a licensed Realtor to look up recent sales on the local MLS. This is something many real estate agents will do as a free service as it is good marketing practice for them to possibly get referrals or future business. If you don't plan on ever using the Realtor, or recommending them, it would be a good thing to offer them a small gift certificate or buy them lunch for their time. Real Estate agents are having a rough year. In some states this may not be allowed unless it goes through the brokerage that they are licensed though. In others they can accept an unsolicited gift up to a certain value.
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Step 3
Once you have an accurate market value for your home simply deduct the amount you have in loans and you will know your equity. For example if you have a value of $300,000 and owe mortgages of $175,000, your equity is $125,000. If you want to get more detailed, subtract the amount it would cost you to sell the home if that is your plan. That could include closing costs, Agent commission (normally 5%-7%)or any advertising you would spend yourself to properly market your home and achieve the market price.
Comments
betterbody said
on 4/21/2009 Good tips in How to Determine Equity in Home
Coach4U said
on 3/13/2009 A home always seems to be a good investment. "5"
luv2blog said
on 10/15/2008 Great info on determining the equity in a home.
GreenGardenChic said
on 10/14/2008 Good to know, especially in this market. 5*.