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Home equity is the amount of money you have paid on the value of your home. A simple formula to determine your home equity is to reduce the total outstanding mortgage from the current fair market value of your home. In other words, your shares increase with decreasing your mortgage balance. If your house has been appraised for $ 200,000.00 and you owe $ 125,000.00 on your mortgage, your equity is $ 75,000.00. Actually, there is a little more for it. For example, consider the fact that many home owners mortgage or second mortgage on their homes. This amount should also be deducted from the value of home equity assessed to determine accurately.

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