24th
July 2010
Financially
Speaking - Home equity
As we continue our focus on mortgages
we present a new term for this week. This week’s
term may be beneficial to homeowners who may
need to source funds to undertake some major
activities: This week’s term is: Home
equity
Home equity is the value of
ownership built up in a home or property that
represents the current market value of the house
less any remaining mortgage payments. This value
is built up over time as the property owner
pays off the mortgage and the market value of
the property appreciates.
What
does this mean for you?
Homeowners can then use this Home equity to
acquire a line of credit from a financial institution.
This loan normally called a home equity loan
or home equity line of credit operates like
a credit card because of its revolving nature.
Since a home is often a consumer’s most
valuable asset, many homeowners use home equity
credit lines for major items, such as education,
home improvements, or medical bills.Taking the
line of credit offers you the security of having
the funds available while not having to pay
any interest unless the funds are used.
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