Home equity 101

July 12th, 2008

If you want to know the home equity value of your property, determine the difference between the fair market value and the unpaid balance. As the mortgage is paid or the property’s value appreciates, the amount of equity increases.
Generally, homeowners use their home’s equity as a means to access money that is invested in a product with a higher rate of return. This is called arbitrage.
For anyone seeking a home equity line of credit (HELOC), home equity may be used as collateral. Tax deductions are available for this type of loan. Consult a tax advisor for more details.

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