The National Directory of Certified Public Accountants

Ask A CPA - Mortgages & Loans

What Does The Term Equity Mean?

Your house equity is the value of your homeowner's unencumbered interest in the house. Equity is the difference between the home's fair market value (FMV)and the unpaid balance of the mortgage and any outstanding liens. Equity increases as the mortgage is paid down over the years or as the property appreciates.

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