What Does Equity In My Home Mean?
This is an email question from Stuart in Nollamara – I have heard the term equity, and have been told I have equity in my home. What does the term equity mean?
Equity in your home is basically the difference between the value of your home and the charge, or value of the mortgage held against it. For example, if your home was worth $400,000 and your mortgage held against the property was $100,000, you would have $300,000 worth of equity.
If you do have equity in your home, it can give you many options, if you are thinking about financing something. You may be able to use your equity to purchase an investment property (with no deposit, as the bank uses your equity to support the new property purchase), shares, a business, etc. You may consider other mortgage finance options as well, like consolidating some debt or renovating your home with your mortgage.
You also could consider your equity as savings, or your investment, as it is your real value of what you own in your property.
If you have any questions or comments, please leave below. If you would like more personal mortgage information, please contact me anytime.