9 Myths About Home Equity: What Homeowners Often Get Wrong

Here are nine myths and misconceptions about home equity and home equity borrowing.

Home equity is based on your home’s worth, but it’s not the same thing. To figure out your home equity, you have to subtract your mortgage balance from the appraised value of your home. Dreamstime/TNS

By Linda Bell Bankrate.com

Home equity sounds like a pretty straightforward concept: it’s the portion of your home you truly own, free and clear of debt. However, when it comes to understanding concepts like how home equity grows, the differences between home equity products, or how much equity you can borrow against—people can get a lot of things wrong.