Equity and Re-mortgages
Understanding the role of equity in a re-mortgage
Equity can be a tremendously important factor in a re-mortgage, especially if you are looking at re-mortgaging your home in order to raise some much needed cash. First, let's take a look at what equity is and how you build it into your home.
Positive equity is the amount of money your home is worth above and beyond the payoff balance on your mortgage loan. Because market values shift, dependent upon a variety of factors, it is entirely possible for your home to be worth significantly more than the amount of money you owe on your mortgage. One of the primary ways this occurs is when property values increase. This generally occurs as a natural course of events, without much effort on the part of the homeowner. If there has been an increased demand for the type, style or location of your home, your property value can increase almost overnight, raising your equity as well.
