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How to Figure How Much Equity I Have in My House

by Steve Lander

Calculating your home's equity is both a simple process and a complicated process. On one hand, the mathematics are very straightforward, since all that you do is subtract your debt from your value. On the other hand, determining your home's value can be challenging. It also depends on what you are going to do with the equity. An appraiser, who would probably get involved for a refinance loan, may have a different opinion of your home's value than a real estate agent who would list your property for sale. With this in mind, calculating your equity is as much an art as it is a science.

Get a current loan statement. You will need it to get your current loan balance, which is what you owe now as opposed to what you borrowed when you first took out your mortgage.

Hire a professional to calculate the value of your house. If you are considering a refinance, an appraiser would probably give you the most accurate estimate. On the other hand, if you'd like to know where a buyer might value your home, having a real estate agent complete a competitive market analysis (CMA) for you would be the best option. Many Internet sites that provide estimated home values are inaccurate. For example, MarketWatch reported that the median margin of error on Zillow was 8.5 percent. This means that, on average, a $300,000 house would be assigned a value anywhere between $274,500 and $325,500.

Subtract your loan balance from your home's value. For example, if you owe $183,000 and your home is valued at $279,000, you would have $96,000 in equity.

About the Author

Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.

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