2007-03-13 00:15:14 · 3 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
If you bought a house at market value and mortaged it for $125,000.00, and two years
later the house market value fell, and your property value became $75,000.00, you would have a negative property value of $50,000.00.
(you would have lost that much.) This also happens with 2nd mortages, as they over appraise the value of a home to enable the loan.
Equity can be caused by paying off a certain amount of the mortaged loan, with property values going up or staying the same.
2007-03-13 00:42:50 · answer #1 · answered by V B 5 · 0⤊ 0⤋
Assets= Liabilities + Equity
You get negative equity when your business owes more than what it is worth. It can happen if it keeps borrowing money while making loses.
Equity also means Net Worth. You get negative equity if the value of your house dives below how much you owe the bank.
Equity= Market value of house - how much you still owe bank
2007-03-13 00:30:45 · answer #2 · answered by James S 3 · 0⤊ 0⤋
negative equitty means you owe more than the house is worth. equity is the current market value, minus the amount owed on the mortgage.
2007-03-13 00:20:51 · answer #3 · answered by njyogibear 7 · 2⤊ 0⤋