is the difference between what a house is worth and what is still owed on it.
Is the difference between what a house is worth and what is still owed on it?
Answer:
The statement refers to the concept of home equity. Home equity is the difference between the current market value of a home and the outstanding balance of all liens on the property. In simpler terms, it is the amount of ownership that has been built up by the homeowner through mortgage payments and appreciation in the home’s value.
For example, if a house is worth $300,000 in the current market, and the remaining mortgage balance is $150,000, the home equity would be $150,000 ($300,000 - $150,000). Home equity is an important financial asset for homeowners, as it can be utilized in various ways such as borrowing against it through a home equity loan, refinancing, or selling the property for a profit. It can also serve as a source of wealth and financial security for homeowners over time.