You have heard the term, but it may be unclear as to what it means and how you determine what the equity of your home is.
Your home’s equity is the difference between how much your home is worth on the market and how much you owe on your mortgage loan. Once you have paid off your mortgage, you will have 100% equity in your home.
Equity is built in two ways: by paying down your mortgage and through the appreciation of your home. The amount of equity in a home fluctuates over time as you pay the mortgage down and as market forces impact the property’s current value.
Home equity is an asset that homeowners can borrow to meet higher-priority financial needs like paying off high-cost debt. The interest rate on home equity-based borrowing is typically lower than that on credit cards and personal loans because equity secures Interest on home equity loans is usually tax deductible if funds go towards improving the home.
If you’re curious about exploring your options our team is here to help! Reach out today to chat with one of our home finance professionals today.
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