Last Updated: October 28, 2015When you think about the assets you own, does your house immediately spring to mind? It should, if you made any down payment on the house. That down payment – whether it was from funds out of your own pocket or money secured elsewhere – represents equity in your house. Your equity in a home is defined as the market value of the property minus any mortgages or liens on the home. If you just bought a house worth $350,000, and you had a 10% down payment, your current mortgage balance is $315,000, which means you have $35,000 in equity in your house. Knowing how to skillfully manage that equity – and properly maintain both your home and your finances so that you avoid financial loss or foreclosure – is part of the job of being a successful homeowner. Why Your Home Is an “Asset” and Not a “Liability” First, let’s take a look at why you should consider your home an asset – because not everyone views your primary residence as an asset. Some people say a home that you occupy isn’t really an asset because a home is constantly taking money out of your … Continue reading Is My Home an Asset or a Liability?
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