Whether you’re upgrading, refinancing, downsizing or looking to put money into an investment property, knowing how to calculate your home’s equity is an essential step in the process. Your home equity is the amount of ownership you currently have in your home. By having an understanding of this number, you can make more educated decisions about your finances. To get a more accurate estimate, you’re better off contacting a real estate or lending professional. But if you want to just do it yourself, here’s a quick way to calculate a rough estimate of your home’s equity.
Current Appraised Home Value - Current Mortgage Balance
= Home Equity
Let’s break this down further.
To find your current appraised home value you can use various online real estate tools such as Zillow or Redfin. For example, simply type in your address, and sites like Zillow will pull up a current estimate of your home, complete with information about the changes in price over the past month and a year-out forecast based on current home and market information. Don’t forget, this tool should just be used to establish a general estimate of your home’s value. Many other factors will contribute, such as interior and exterior upgrades and home improvements or the condition of your home. These factors are best assessed by a professional.
After you have determined your home’s current estimated value, finding your current mortgage balance is easy. This number should be listed on your most recent mortgage statement or your online account. If you are having trouble finding this, contact your lender.
Keep in mind, when selling your home, other fees and taxes (closing fees, property taxes, etc.) will affect the amount you net on the sale of your home. So, while calculating your estimated equity, you should always remember it is just that, an estimate.
Interested in learning more about your home’s equity or want a real estate professional to help?