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TeachMeFinance.com - explain equity Equity -- an owner's financial interest in a property;
calculated by subtracting the amount still owed on the mortgage
loon(s)from the fair market value of the property.
Equity -- An accounting term used to describe the net investment of owners or stockholders in a business. Under the accounting equation, equity also represents the result of assets less liabilities.
equity -- in real estate, equity is the difference between the fair market value of a property and the amount of any mortgage debt, or liens against the property, still outstanding. In business, the excess of a firm's assets over its liabilities. The term is also used to refer to the ownership interest of stockholders in a company, and to the value of the investments raised by the stock offerings.
historic definition... Equity -- The equity in property is the difference between the value of property mortgaged or otherwise encumbered and the amount of the obligation (debt) to secure which the property is pledged. Thus, the equity in a loan is the difference between what the securities pledged as collateral are worth and the amount borrowed on them. As a rule securities are accepted as collateral by lenders of money at about 80 per cent of their market value that is, a lender will lend $80,000 on securities of the market value of $100,000 or will lend $100,000 on securities of the market value of $125,000. About the author
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