Understanding Home Equity
What equity is, how it accumulates, the four ways to access it, and how to decide whether borrowing against your home is reasonable.
Senior Editor, Home Finance
Jordan Mabry
Jordan Mabry has covered mortgages and household finance for more than a decade, including six years reporting on lending policy. Jordan translates loan estimates, escrow statements, and rate sheets into decisions ordinary buyers can actually make.
Former mortgage loan originator (NMLS licensed, 2012-2017).
Articles by Jordan Mabry
18 published pieces.
- How Much House Can You Afford?Lenders will usually approve you for more than you should spend. Here is how to work out a number that fits your actual life, not just an underwriting formula.
- Mortgage Preapproval ExplainedA preapproval turns you from a browser into a buyer. Here is what lenders check, what you need to hand over, and why the difference between prequalified and preapproved matters when you write an offer.
- Homebuying Closing Costs ExplainedClosing costs typically run 2 to 5 percent of the purchase price. Here is what each line item actually pays for, and which ones you can shop or negotiate away.
- Conventional, FHA, VA, and USDA Loans ComparedThe right loan program depends on your credit, your cash, your service history, and where the house is. Here is how the four main options differ.
- How Much Do You Really Need for a Down Payment?Twenty percent is a norm, not a requirement. Here is what each down payment level actually costs and saves.
- Seller Closing Costs: What You Actually NetSale price is not proceeds. Here is every deduction between the two, and how to estimate your net before you list.
- Homeowners Insurance ExplainedMost homeowners have never read their policy. Here is what the declarations page actually means, and the four gaps that catch people at claim time.
- HELOC vs. Home Equity Loan: Which Is Right for You?Both let you borrow against your equity, and they behave completely differently. The right one depends on whether your expense is a number or a range.
- When Should You Refinance?The old rule about waiting for a rate drop of a certain size is not useful. The real question is your breakeven point and how long you will keep the loan.
- How to Build a Home Emergency FundHomeownership converts a landlord's problem into yours. A dedicated repair fund is what keeps that from becoming credit card debt.
- Home Equity: How It Builds and How to Use ItEquity is the part of your home you actually own. Here is how it accumulates and what it is reasonable to do with it.
- Understanding Your Escrow AccountYour mortgage payment changed and the interest rate did not. This is almost always escrow — here is how it works.
- Property Taxes Explained (and How to Appeal Yours)Property tax is assessment times rate, and homeowners can influence one of the two. Here is how assessment appeals actually work.
- Private Mortgage Insurance: What It Costs and How to Cancel ItPMI protects the lender and you pay for it. Here is what it costs and the three ways to get rid of it.
- Mortgage Points: When Buying Down Your Rate Pays OffA point costs 1 percent of the loan and buys a lower rate. Whether that is a good trade comes down to one calculation.
- How Your Credit Score Affects Your MortgageCredit score is the single largest driver of your mortgage rate after the market itself. Here is how the tiers work and what actually moves a score.
- How to Finance a Home RenovationSix ways to pay for a renovation, ranked by cost — plus which one fits a project with an uncertain final number.