EquityThe equity is the difference between the value of a property, including all payments that have been made towards the principal of the loan, and the balance of what is owed on the loan. The equity is the amount that the owner of a piece of property actually owns. It is the value minus whatever is owed on the property.
If you own a home that is under a mortgage, you can take out a type of loan called a home equity loan. A home equity loan uses whatever equity your home has as collateral for your loan. A home equity loan is a good way to get a personal loan at an affordable interest rate, provided you have a good credit history. If you think you might want to apply for a home equity loan, check with your mortgage company to find out how much equity your loan has built up.
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