Do You Know How Much Equity You Have?

Have you checked in on your home’s equity lately? Now is a great time to see what your equity looks like because, chances are, it’s increased especially here in the Fraser Valley.

 

But let’s review what equity is before we jump into how you can find out how much you have. Equity in your home is how much money you have in your home–it’s the amount of your home that you actually own. The more equity the better because that means you’ll get more money from the deal when you sell your home!

Your equity increases over time for two reasons: you pay money into your mortgage and the value of your home increases. Because home values have been skyrocketing over the past couple of years, your home’s equity is probably more than the money you’ve paid into your mortgage. And that’s why you should check on your equity! 

Here’s how to do a quick and easy equity calculation. First, find your home’s current market value. You can check with your real estate agent to get an accurate valuation.

Next, look at your last mortgage bill and find how much you have left to pay on your mortgage. Once you have that number, you’ll just subtract that from your home’s current market value. 

The resulting number is the amount of your home that you actually own–how much you have in equity! For example, if your home is worth $350,000 right now, and you have $225,000 left on your mortgage, you would have $125,000 in equity. And the odds are good that the amount you have in equity is way more than you’ve made in mortgage payments. That’s the beauty of real estate–you can make money by doing nothing more than living in your home.