I don't know so much about that, I just hear people talking about those words on the time, but I don't understand much, Please help me identify these words clearly. thanks you guys
2007-11-09 03:43:41 · 4 answers · asked by loan l 1 in Business & Finance ➔ Investing
Mortgage is the amount of a loan you have. Basically your mortgage is the amount you owe on a house.
Equity is what the house is worth that is higher than your mortgage.
For example, You have a house worth $250,000. You have a loan that you are paying that amounts to $200,000.
Your mortgage is $200,000, and your equity is $50,000.
2007-11-09 03:56:04 · answer #1 · answered by Butch 3 · 0⤊ 0⤋
The mortgage amount is what you owe on the property. The Equity is the difference between what the bank figures the property is worth minus the mortgage or what a buyer will pay for the property minus the mortgage. And the mortgage amount is the current debt - not the amount of debt when you first took the mortgage out.
2007-11-09 12:11:22 · answer #2 · answered by Penny Stocks Guide 1 · 0⤊ 0⤋
Equity can also be the amount your home has incresed in value in addition to the amount of mortgage you've paid. If you took out a loan for $130,000 and you've paid $20,000 on the principle (meaning your still have a mortgage of $110k), but the house has increased in value another $30k (meaning you could sell it for $160k on the open market) then you would have $50,000 equity in your home ($20,000 you've paid on the mort. principle and $30,000 in appreciation).
2007-11-09 12:00:51 · answer #3 · answered by voluntarheel 5 · 0⤊ 0⤋
Equity is the difference between what you own and what you owe.
In the following example, the equity is $70,000.
If you owe $50,000 on a mortgage loan and the house is worth $120,000, then your equity is $120,000 - $50,000 or $70,000.
2007-11-09 13:20:35 · answer #4 · answered by nevertheless 3 · 0⤊ 0⤋