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Housing Equity

Home equity is the difference between the market value of a homeowner's property and the outstanding balance on their mortgage. It represents the homeowner's net ownership interest in their property and can be considered as a type of savings account that is built up over time as the mortgage is paid down and the property increases in value.

For example, if a homeowner has a property worth $500,000 and an outstanding mortgage balance of $300,000, their home equity would be $200,000 ($500,000 - $300,000). Homeowners can access this equity by taking out a loan, known as a home equity loan or a second mortgage, or by selling the property and using the proceeds to pay off their mortgage and other debts. Home equity can also be used as collateral for other types of loans, such as home equity lines of credit.

See also

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