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Straightup32 t1_je3bgia wrote

Equity is a liability that will eventually become an asset.

At this moment, your paying a bill. But that hill has an end date and once that end date arrives, you will own it and you will be able to sell or so what you want with the asset.

The equity in a home is how much of that debt you have converted into an “asset”. If the house is worth 200,000 and you have a 100,000 paid off, you have a hundred thousand dollars in equity.

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mikeholczer t1_je3cc3b wrote

You can also gain or loss equity if the value of the asset goes up or down. I’d think of it as what you would get to keep after selling it at the current market value and paying off any debt.

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