
When mortgage rates are low but rising, equity growth comes through amortization rather than appreciation. Equity is the cash value stored in a owner's house. Many people assume equity is the difference between what a house is worth and what they owe on it, but this overstates the reality by 8% or more of the estimated value because if a homeowner needed to convert the house to cash, they would need to sell it, discounting the property from their perceived value and incurring fees and costs in the process. People who purchase real estate use the phrase “building equity” to describe the overall increase in equity over time. However, it is important to look at the factors which either create…[READ MORE]