How to Determine Home Equity

Video Transcript

"This is financial adviser Patrick Munro answering the question, how can I determine the amount of equity I have in my home? This is a question answered by a lot of Americans. And the home, of course, is one of the largest assets that anyone ever achieves. And when you originally take out the mortgage, you are required to put a down payment down. That's the first bit of equity that you ever achieve in life. As years go by and house values hopefully go up and you pay your mortgage value down, there's a middle ground from those two that grows. And that is your equity. How do you calculate it? Well, the best way is to always have an appraisal, a current appraisal of what your property is worth in the marketplace that the property is located in. Always use a certified appraiser that's on the bank list, as well, to get that valuation. Once you get the valuation of the property, you can find out what your mortgage balance is at that particular point in time, and compare the two numbers. The difference between the two is the equity. And of course, if you decide to harvest that equity out using a home equity line of credit, be aware of the lending guidelines that the financial institution has. This is Patrick Munro, financial adviser, talking about how to determine the home equity in your home."