Definition of Equity:

Definition of Equity in a Orange County, California Home:

The amount of a home's value that the owner actually owns, calculated by taking the fair market value (FMV) of the home and subtracting the amount the owner still owes on their mortgage loan. Equity is the amount of money you would get from the sale of a home after paying off the lender.

Here is a BanCorp REG example: let’s say a person takes out a $600,000 mortgage to buy a $850,000 home, the moment the walk in to the property that have $250,000 equity and it will increase each month as they make their mortgage payment by the exact amount that their principal balance drops – assuming that the property is neither depreciating or appreciating. One of the reasons that people buy homes is for investment reasons; if the property where to jump to a market value of $950,000 the owner would now have $350,000 equity in the property. Some homeowners and many REALTORS® in Orange County believe that real estate is a better and safer investment than stocks or other risky investments.


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