If you’re going through the mortgage process, you’ve probably heard the term “home equity” thrown around. Home equity is homeowners interest in a home. It will likely increase over time if the property value increases or the loan balance is paid down. So basically, it’s the portion of your property that you truly “own.” If you borrowed any money to buy your home originally, you do technically own your home, but your lender also has an interest in it until you pay off the full loan.

Typically, the easiest way to understand equity is to start with the home’s value and subtract the amount owed on any mortgages. Those mortgages might be purchased loans used to buy the house or second mortgages that were taken out later.

Home equity is usually a homeowner’s most valuable asset; it can be used later in life, so it is important to understand how it works and how to use it effectively. This is where we come in. We are happy to walk you through the entire mortgage process and make sure you understand it all, including home equity!

With equity being an asset, it becomes part of your total net worth. You can take partial or lump-sum withdrawals out of your equity if you need to, or you can pass it on. There are several ways to put this asset to work:

  • Buy your next home
  • Borrow against the equity
  • Fund retirement

Ready to get started? Contact us and we can see if you qualify for home equity!