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Do you have to pay back equity that you build up in your home? If not how do you get it?

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mamaofficer

Asked by mamaofficer at 6:30 AM on Jul. 5, 2010 in Home & Garden

Level 31 (50,120 Credits)
Answers (7)
  •  You get it when you sell your house, it's the part you own free and clear after you pay the unpaid mortgagebalance.  What you owe, minus what your house is sold for, if this is a positive number that is your equity.

    RyansMom001

    Answer by RyansMom001 at 6:34 AM on Jul. 5, 2010

  • Equity is the difference in what you owe on your mortgage and how much you could get if you sell your house You can borrow against this amount as a loan. And yes, you would need to pay it back.
    layh41407

    Answer by layh41407 at 6:35 AM on Jul. 5, 2010

  • You can build equity by including an extra amount with your house payment and designate it to principle. It is the principle amount of the loan that is the actual amount you borrowed. Make sure you tell the bank where to put the money or they will apply it to interest which their money and principle is your money. If you have equity in your home, you can borrow against that equity, it is collateral. You have just made what is basically a 2nd mortgage. You can claim the interest paid on this loan just like your original mortgage.

    jesse123456

    Answer by jesse123456 at 7:17 AM on Jul. 5, 2010

  • Oh I see thanks ladies.
    mamaofficer

    Comment by mamaofficer (original poster) at 7:40 AM on Jul. 5, 2010

  • NO, It is the part of your house that is yours FREE and CLEAR! You get the money when you SELL your house (hopefully!)
    plclemo

    Answer by plclemo at 8:43 AM on Jul. 5, 2010


  • Home equity is the current market value of a home minus the outstanding mortgage balance. Home equity is essentially the amount of ownership that has been built up by the holder of the mortgage through payments and appreciation. Typically, residential property is bought through a mortgage, which is then paid off over a number of years, often 15 or 30. After the mortgage has been fully repaid, the property then belongs to the mortgagor, namely the buyer. In the interim, however, the buyer simply builds up equity in the home. This is what a home equity loan borrows against.

    Any money you get from selling the house is called capital gains, not equity.
    layh41407

    Answer by layh41407 at 4:25 PM on Jul. 5, 2010

  • If you sell your house for far less than it is worth, you can lose your equity.
    Iamgr8teful

    Answer by Iamgr8teful at 9:25 PM on Jul. 5, 2010

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