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Do u have to pay back the equity that u have on your house? I wanted to do some home improvement and,but my house is not paid for.

I don't know how that works. If your house is paid for do u have to pay it back.


Asked by officerdouglas at 9:50 AM on Jan. 25, 2010 in Home & Garden

Level 2 (10 Credits)
This question is closed.
Answers (4)
  • Equity is the difference between the value of the home and what you have left owing on your mortgages (liens or any other debt secured using the property). Until you sell the building, it's all pretend money. You can borrow against equity (with equity-access loans), but it's very expensive debt, particularly if the value of your home drops when you need to sell it. You can end up walking away with a lot of debt, and no home.

    Which is what happened to millions of people with the last housing bubble burst.

    It can affect your credit score, and end up costing you a lot of difference in mortgage rates if you need to rewrite a mortgage when the property value is low (the more debt is tied up, the 'higher ratio' your house in worth-to-debt... and high ratio morgages--less than 25% equity--do not get as good an interest rate as low-ratio--more than 25% equity--mortgages). A few % can mean paying thousands more $$ for the house.

    Answer by LindaClement at 11:50 AM on Jan. 25, 2010

  • No. Equity is your money that you have invested in the home and paid off. If you borrow money against that equity (putting the equity up for collateral) then yes you have to pay that back. Anything you go and borrow like from a bank or lending institution then you have to pay back but equity itself is your's.

    Answer by admckenzie at 9:56 AM on Jan. 25, 2010

  • If you borrow against the equity on your house of course you have to pay it back. You can't use equity without selling your home or borrowing the money. If you take out a home equity loan you still make payments or If you sell your home you can pay it off

    Answer by itsmesteph11 at 5:32 PM on Jan. 25, 2010

  • Yes You do and with interest.

    Answer by Jodie269 at 7:44 PM on Jan. 25, 2010