Julie bought a house for $315,000 and has a $285,000 mortgage. She claims she has $315,000 in equity. Is she correct? If not, how much home equity does she have? Explain.
Answer
Answer:
No, she is not correct. She has only $30,000 in home equity. Equity is the value of ownership in an asset minus any debts owed on it. $315,000 minus $285,000 is $30,000.