Debt Glossary : Equity
Although the term equity has several meanings in the financial area, it is most commonly used to mean the difference between the market value of your home, and the outstanding balance of the mortgage secured on it.
If your home was worth £100,000 and you still owed £60,000 on your mortgage, you would have equity of £40,000.
Equity can be important for people with debt, as it can be an important factor in obtaining a debt consolidation loan, with lenders more willing to advance a secured loan on a property with plenty of equity.
© 2008 Debt Sorter
