Most people with a passing familiarity with property ownership are aware of the concept of equity. Unfortunately, many first-time owners are less clear about what equity means, how it works, and what its overall value is. Because equity indicates the value an individual has accrued on his or her property, it is important to understand the concept.
Equity is the amount of a property or business a mortgage borrower owns. Typically, as a borrower pays off the principle of a mortgage loan, he or she directly owns more of the property. For example, if you have paid back $20,000 of a $100,000 mortgage loan, you effectively own $20,000 of the property, while the lending institution owns $80,000.
One of the main benefits of owning a home rather than renting is building up value over time. The more equity is built up in your home, the more actual value you have.
If you are living with large amounts of debt and can no longer support yourself or your family, filing for bankruptcy may be the best way to overcome your debts. To discuss your case in detail with one of our experienced and compassionate Milwaukee bankruptcy attorneys, please contact us today by calling 414-377-0518.