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.
No she is not. Equity is equal to assets less liabilities. Her asset is the house market value and her liability is the payable mortgage amount of the house. where asset = $315000 liability = $285000
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.
