Have you heard the term “Equity” before and wondered what it actually means? In short, Equity is the value YOU own in property such as a house. It’s the difference between what’s OWED and what the property is WORTH in the current market.
In the example this video shows – if you have a house in Fort Myers or Cape Coral worth $300,000 today and you owe the bank $200,000. Your equity would be $100,000.
If the house is valued at $500,000 in five years, and you still owe $150,000 your equity will be $350,000.
Equity grows if the property value goes up or if the amount owed goes down. The key thing to remember, simple as it sounds, is that you “own” increases in value. The bank’s loan doesn’t go up if the home’s value goes up.
Equity in a home can be used as collateral for loans but a house is not a piggy bank. Home equity can become a key financial asset over time; treat it wisely.
More questions about understanding Equity in Fort Myers, Cape Coral and other surrounding areas? Give Title Junction a call at 239.415.6574.
In case you missed it, check out our last Title Junction post for finding information on Schools and Community Resources in the Fort Myers and Cape Coral areas.