What Is Home Equity?
Home equity is the portion of your home’s value that you truly own. It's calculated by subtracting the amount you still owe on your mortgage from the current market value of your home. For example, if your home is worth $400,000 and you owe $250,000, you have $150,000 in home equity. This equity grows as you pay down your mortgage or as your property appreciates in value. It’s a valuable financial asset you can tap into, particularly when you’re ready to buy your next home.