For people like realtors, sometimes the most basic knowledge can be something that newcomers to home ownership might not fully understand.
One example is home equity.
Most people get it, that home equity means the size of the “stake” you have in your home.
If it’s something you’ve never thought about because you’ve never been a home owner, here’s a simple definition.
Your mortgage is $500,000. The value of your home is $700,000, in today’s market. So your “equity” is $200,000. The mortgage holder has the $500,000 part of the equity.
If you need money for another investment or expense, banks and lenders will allow you to borrow against that — the portion of your home that you own.
Maybe they should call it “own” equity.