Many people have experienced worry and fear over the past year with the downturn in the economic climate. There is hope–the stock market is starting to recover, mortgage rates have returned to historic lows, and real estate prices have rolled back–all in an effort to improve and secure our financial future.
There’s even more good news for home owners. Did you know your home’s equity is an important asset used to figure out your net worth? Even though there has been a downturn in the real estate market, you may have gained more wealth without knowing it, simply from owning a home.
If you’d like to know how to calculate the home equity of your home, subtract your outstanding mortgage balance from the fair market value of your home. The balance will tell you the amount of asset you have in your home.