What Is Home Equity and How Does It Work?
What Is Home Equity and How Does It Work? This article will explain the basics of home equity. Before you borrow money to pay off a loan, you need to know how much equity you have in your home. If you don't know, you should first calculate your home value to determine its equity. Many online home price estimators or real estate agents can do this for you. Your lender may also order a professional property appraisal. From there, you can subtract the mortgage balance and any other debts secured by your property. The remaining value of your home is your home equity.
When you borrow from your home equity, you can use the money to consolidate other debts, such as credit cards. The interest on these loans are usually lower, so you can use the money to pay off debts more easily. However, you ...