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Definitions of Home Equity

• The value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments. This definition of Home Equity contributed by James Boyer.
• Home equity is the difference between the principle balance of any loans leaning against a home and the lenders' appraised value. The current market value may be less or more that the appraised value. Usable home equity deals only with appraised value. Remaining mortgage payments on a new $100,000 loan at 10% interest and thirty years is about $216,000. If I pay on that loan for 10 years my principle balance would be about 90,938 but the remaining payments would still be around $210,000. So one must use principal balance rather than remaining payments to figure equity.