How Do I Calculate Home Equity?
How do i determine the equity in my home?
What are the best options in your opinion?
Please point me in the right direction.
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There are a variety of methods to determine the equity that you have in your home.
What is home equity? It is the difference between what is owed on a mortgage (or mortgages) and what the home is worth in the marketplace.
Always keep in mind that determining precise home equity is somewhat of a guessing game. Ultimately, your home is only worth what someone is willing to pay for it. But banks do rely on various methods of appraisal when loaning money on real estate.
Here are a few methods for determining the equity in your home.
1) Have the home appraised by a licensed appraiser. Appraisers take many factors into consideration when determining what your home is worth in the marketplace. For more accurate results, get more than one appraiser to give you their professional opinion, then take the average of all of them.
This service is usually in the $200-300 range depending on the appraiser.
2) Have a reputable real estate broker do a Comparative Market Analysis (CMA) on the home. Other than a professional appraisal, this method will give you a pretty good idea of what similar homes are selling for in your area. Choose a broker with many years of experience locally.
Most real estate agents or brokers will provide a CMA to you at no charge. They will come calling should you decide to sell your home with a broker.
3) Use online resources to get an idea of what your home is worth. Sites like http://www.zillow.com and http://www.trulia.com are another option to giving you a good ballpark figure as to what your home is worth. These sites pull homes sales data from public records and present them in an organized fashion. Some real estate professionals shun using these types of sites because they claim they are not accurate, but they can be a terrific resource in gleaning information from your local real estate market.