What Is Equity and How Do I Know How Much I Have?

If you own a home, you’ve probably heard the word “equity” — but what does it actually mean? And how can you find out how much equity you have?

Whether you’re thinking about selling, refinancing, or just want to better understand your financial position, this quick guide breaks down everything you need to know.

What Is Home Equity?

Equity is the difference between what your home is worth and what you still owe on your mortgage.

In simple terms:
Equity = Your Home’s Market Value – Your Mortgage Balance

For example, if your home is worth $400,000 and you owe $260,000 on your mortgage, you have $140,000 in equity.

Equity is like a real estate savings account — it grows over time as your home increases in value and as you pay down your loan.

How Does Equity Grow?

You can build equity in two main ways:

1. Through Appreciation

As the real estate market grows, your home may naturally go up in value. In Central Florida, many homeowners have gained tens of thousands in equity over the last few years just from appreciation alone.

2. By Paying Down Your Mortgage

Every time you make a monthly payment, a portion goes toward your principal balance — which increases your equity.

You can also grow equity faster by:

• Making extra mortgage payments

• Making value-boosting improvements (like a kitchen remodel or a new roof)

• Watching for major price appreciation in your neighborhood

How Do I Know How Much Equity I Have?

Here are 3 ways to estimate your home equity:

Step 1: Know Your Home’s Market Value

Check recent sales of similar homes in your area — or better yet, request a professional home valuation. I offer free comparative market analyses (CMAs) for Central Florida homeowners.

Step 2: Check Your Loan Balance

Look at your latest mortgage statement or log into your lender’s portal to see your current principal balance.

Step 3: Subtract the Loan from the Value

Let’s say:

• Estimated home value: $425,000

• Remaining mortgage: $240,000

• Your equity: $185,000

It’s that simple.

Pro Tip: Want a precise number? I can run a local market report tailored to your home’s features, location, and current conditions.

Why Does Equity Matter?

Understanding your equity can help you:

• Sell confidently: Know how much profit you might walk away with

• Refinance smartly: Tap into your equity to consolidate debt or lower payments

• Buy again: Use your equity as a down payment for your next home

• Build wealth: Equity is one of the biggest financial benefits of homeownership

In short, equity gives you options — and knowledge is power.

Want to Know Your Exact Equity?

If you're curious about your home's current market value and want to know exactly how much equity you’ve built, I offer no-cost, no-obligation home equity reviews for homeowners across Central Florida — including Clermont, Mount Dora, The Villages, and surrounding areas.

📩 Let’s connect — I’ll send over a personalized equity snapshot and answer any questions about your options.

Final Thought

Equity is more than just a number — it’s a measure of your financial strength and freedom as a homeowner.

If you’re not sure how much you’ve built (or what you can do with it), let’s take a look together. Whether you’re staying put or planning your next move, your equity can help unlock real opportunities.