1. What is Home Sale Equity?

Home sale equity represents the portion of your home's value that you truly own. It's calculated by subtracting your outstanding mortgage balance from the current market value of your home.

2. How Does the Calculator Work?

The calculator uses the simple equity equation:

Where:

• \( Home\ Value \) — Current market value of your home
• \( Mortgage\ Balance \) — Remaining amount owed on your mortgage

Explanation: This calculation shows how much money you would receive if you sold your home after paying off the mortgage.

3. Importance of Equity Calculation

Details: Knowing your home equity is crucial for financial planning, refinancing decisions, home equity loans, and understanding your net worth.

4. Using the Calculator

Tips: Enter your home's current market value and remaining mortgage balance in USD. Both values must be positive numbers, with home value typically greater than mortgage balance.

5. Frequently Asked Questions (FAQ)

Q1: What if my mortgage balance is higher than my home value?
A: This means you have negative equity (underwater mortgage). You would owe money if you sold the home.

Q2: How often should I calculate my home equity?
A: It's good practice to calculate annually or whenever your home's value changes significantly.

Q3: Does this include selling costs?
A: No, this is gross equity. Net equity would subtract closing costs, agent commissions, etc.

Q4: How accurate is this calculation?
A: It's mathematically precise, but depends on accurate home valuation and mortgage balance.

Q5: Can I use this for rental properties?
A: Yes, the same calculation applies to any property with a mortgage.