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We’ve owned a home for a year now and recieved a flyer from our bank about applying for a home equity loan. we want to apply so that we can possibly do a little debt consolidation (just a few thousand in student loans and credit cards) but how do you determine if/how much equity you have?

5 Thoughts on How do you know how much equity you have in your home?
  1. Reply
    DeeDee
    December 8, 2012 at 3:50 pm

    The bank would see what the appraised value of your home is, less the mortgage amout owed. This would then be your equity, if any.

  2. Reply
    s and d e
    December 8, 2012 at 4:04 pm

    what is the appraised value of your house vs. how much you owe on the house. for example: if you bought a $ 150,000 house-put down $ 10,000.00 and have paid $ 5,000 towards the principal (not interest) then your would have equity of $ 15,000.00. try working your debts smallest to largest and just paying them off. ck out this website: http://www.daveramsey.com–they helped us when we were in debt. it’s just free advice–no consolidation, no fees–it’s great!

  3. Reply
    Dizzy_Lizzy
    December 8, 2012 at 4:37 pm

    Fair market value – what you owe = equity amount

    To find fair market value, consult an appraiser.

    I suggest you read this: http://mortgages.weblogsinc.com/2006/07/26/using-home-equity-to-pay-off-credit-debt/ and do some other research on the subject. Paying debts with the equity in your home is not often a smart move.

  4. Reply
    Rush is a band
    December 8, 2012 at 5:12 pm

    The other answers are right about equity. Fair market value – current mortgage(s) balance = equity.

    Some things you may not have thought about for home equity loans. The percent of equity you borrow will change the risk for the lender and therefore the cost of the loan for you. What I mean is, if you borrow the very last penny of equity it will be more expensive for you (a higher rate). If you have significant equity (which would only be if you put down a lot of money) then the loan wouldn’t be as expensive. It really can make a difference in the interest rate.

    good luck!

  5. Reply
    Camila B
    December 8, 2012 at 5:38 pm

    Practically any type of loan can be wrapped into the debt consolidation process. Common types include finance charges, late fees and overdraft charges, credit cards, personal loans, utility bills, medical bills, car loans, store cards, gas cards and back taxes. A debt consolidation loanold loans are replaced with a new one that has more favorable terms. Your loan consultant will negotiate with creditors on your behalf, so you’ll no longer have to deal with harassing phone calls and daily mail.

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