Definition - What does Home Equity mean?
Home equity is the financial worth of a house when the value of the remaining owed payments is subtracted from the total. The value of the house is decided by the current real estate market. This value can fluctuate up or down depending on how well the real estate market is doing,
Justipedia explains Home Equity
The value of the person's home equity is largely dictated by how much they have left to pay on it. For example, imagine that the current real estate value of a man's home is $300,000.00. If the man has paid $200,000 dollars, then his home equity is $200,000.00. This is because that is the equivalent of the total value, $300,000.00, minus the remaining payments, $100,000.00.
Home equity is used to determine how much a person can borrow when pursuing a home equity loan.