How does home equity work?

Home Equity is the difference between what the property is worth minus what you owe... If you buy a home for $300K, and you finance $250K, then you have $50K equity on day one.. but don't confuse equity with gains. in this scenario, you have zero gains. Same scenario, but 5 years later, and the home is now worth $350K, and you owe $235K, you now have $115K in equity, but only $50K in gains. So to answer your question.. if you paid $300K for a home and you financed $300K, then you have zero equity.. I'm a preferred Lender with Arizona and California being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893