Understanding Home Equity

Most people don’t understand home equity and the borrowing power it holds.

Home equity is financial leverage for whatever your needs may be right now. Built up equity in your home, summer property or weekend retreat can be converted to cash with the help of your bank or an online lender. In simple terms, equity is determined by assessing the value of the property and subtracting the current balance owing.

If your home is valued at $120,000, and you owe $50,000 on it, you have $70,000 in built up equity that you might be able to access for an emergency or a downpayment on your country home.

Often without realizing it, many homeowners have a substantial amount of equity built up in their houses and properties but don’t take advantage of their equity even in dire conditions.

Use your equity if you really need it, or if you want to upgrade before retirement or sale of your home. Your return will be worthwhile.