Monday, June 30, 2014

A: It is the cash value of your property over and above what is owed on it, including mortgages, liens, and judgments.

The amount of equity almost always grows in a home over the years, although regional economic slumps or overbuilding might result in a temporary dip in prices.

The good thing is you can borrow against the equity that builds up in your home and use it for any number of reasons, including home improvements and to pay for college costs. It also is a source of income for you once the home is sold.

Equity is also what makes seller financing possible. If you have money to spare, you can always lend some to the buyer and collect interest on it.

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