How much equity do you have in your home? That's an important question for homeowners who want to refinance an existing mortgage or take out a home equity loan or home equity line of credit, sometimes called a "HELOC." A home equity calculator can help you determine the amount of equity that your currently have in your home.
Home equity is simply the current value of your home minus the amount you owe on your mortgages. For example, if your home was worth $300,000 and you had a $250,000 mortgage and a $20,000 home equity loan or HELOC, you could calculate your equity like this: $300,000 - $270,000 = $30,000
How a home equity calculator worksAs you can see, equity isn't difficult to calculate since the calculation only involves a few numbers and some subtraction. But there's no reason not to let a home equity calculator, also called an equity calculator, make the calculations for you. What's more, a good home equity calculator will show you not only how much equity you have, but also how much you might be able to borrow in a home equity loan or HELOC.
To use a home equity calculator, you'll need to enter the value of your home and the principal due on your mortgage into the equity calculator. Remember that the value of your home is the current market value, not the amount that you paid for your home when you bought it. If you don't know how much your home is worth, you can check a few online home valuation websites, try to make an educated guess and enter that into the home equity calculator. Remember also that the principal due on your mortgage is the current outstanding balance, not the amount you originally borrowed. You can find your loan balance on your monthly loan statement and enter that into the home equity calculator. Once you enter the data, the calculator works in much the same way as other mortgage calculators do.
Using a home equity calculatorIf you want to obtain a home equity loan or HELOC or if you already have a home equity loan or HELOC, you can put loan amount or balance into the home equity calculator as well. Again, you can find your loan balance on your monthly loan statement. The more information you put into the home equity calculator, the more reliable the calculation of your equity will be. If you don't yet have a home equity loan or HELOC, you can just leave that field. The home equity calculator will still work fine.