How to Calculate Equity in Your Home (and Why It Matters)
Your home is not just where you live it is one of your biggest financial assets. Do you know how much equity you really have?
What Is Home Equity?
Home equity is the difference between your home’s current market value and what you still owe on your mortgage. It’s the portion of your home you truly own, and it can unlock major financial opportunities.
How to Calculate Your Home Equity:
- Find Your Home’s Current Market Value: Use recent comparable sales (comps), or get a professional valuation for the most accurate number.
- Subtract Your Mortgage Balance: Look at your latest mortgage statement to find what you owe.
Example:
- Home Value: $500,000
- Mortgage Balance: $350,000
- Equity = $150,000
Why Does Home Equity Matter?
- Leverage for Your Next Move: Use equity as a down payment for your next home.
- Access to Cash: Tap into your equity with a HELOC or cash-out refinance for home upgrades or investments.
- Build Long-Term Wealth: More equity means more financial flexibility for the future.
Want to Know Your Equity?
If you are curious about how much equity you have, I’d be happy to provide a free market analysis to give you a clear picture. Understanding your equity is the first step to making smarter real estate decisions.
