Home equity
Equity
The share of your home you actually own — its market value minus everything you owe against it. Equity grows as you pay down principal and as the home appreciates.
What does equity mean?
Equity is your ownership stake: a $300,000 home with a $210,000 mortgage holds $90,000 of equity. It builds two ways — by paying down principal and by the home rising in value — and it's what you tap with a HELOC, a home equity loan, or a cash-out refinance.
Many Michigan owners have far more equity than they realize after values climbed since 2020.
Lenders generally let you borrow against equity only down to 80–90% combined loan-to-value, so you keep a cushion of ownership.
A Michigan example
Suppose your home is worth $285,000 and you owe $200,000. Your equity is $85,000. At an 85% combined loan-to-value cap, a lender would let total borrowing reach about $242,250.
Subtract the $200,000 you already owe, and roughly $42,250 of that equity is accessible to borrow — the rest stays as your ownership cushion.
Common questions
What is negative equity?
Owing more than the home is worth — being "underwater." It blocks refinancing and complicates selling, since you'd owe the lender the shortfall. It's far less common in Michigan after recent value gains.
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