What is Equity: Understanding Real Estate Vocabulary

 

Equity is the share of your home that you “own” (have paid off) versus what you still owe on your mortgage (and any other liens you might have).

 

For example, if your home is worth $330,000 and you have a remaining mortgage balance of $280,000, your home equity would be $50,000.

 

Your equity will increase as you continue to make your payments. As time goes on, more and more of your payment will go toward the principal balance increasing your equity more rapidly.

 

Market fluctuations can also impact your equity. Your equity will increase with appreciation but decrease with depreciation.