What is Home Equity?

Home Value, Atlanta Real Estate

What is home equity?

Home equity is the difference between fair market value and outstanding balances of all loans related to your property.

Home equity is gained in the following 3 ways:

  1. Capital Improvements:
    Capital Improvements are repairs or alterations made to a property that drastically improve it and therefore increase its value.

  2. Principal Balance is Paid:
    Your principal balance is the amount of your loan owed without including interest. Check your mortgage statement to see how much of your principal is still owed.

  3. Property Appreciation:
    Appreciation is the growth in value of an item over time, in this case your property. Fortunately, property appreciation is extremely common, and something that can be calculated. Click here to get your free property appreciation analysis in the form of a CMA.

How is home equity calculated?

Home equity is calculated by subtracting the mortgage balance and other secured debts from the current market value of your property. Finding the current market value of your home can be a little tricky as most popular real estate sites can provide false value estimates, while other methods such as appraisals can be costly and a poor reflection of your home’s value in this ever changing market. The best way to find the market value of your home is to get a CMA from a licensed realtor, familiar with your area.

Are you interested in a FREE, personalized Home Equity Report?

Contact us and let us know you’d like to understand your home equity more - we love digging into the numbers!