The equity that a homeowner has in a house is the amount of money that could be made by selling the house and paying off the mortgage. This idea is similar to the idea of owners' equity in a business.

Question

Quizplus · Accepted Answer

The equity in a house is indeed the difference between the current market value of the property and the outstanding mortgage balance. Similarly, owners' equity in a business represents the residual interest in the assets of a company after deducting liabilities. Both concepts relate to the proportional ownership of assets in relation to debts or other claims on those assets.

The Equity That a Homeowner Has in a House Is