1

A lot of people also

Submitted by Xin Lu on March 13, 2008 - 13:47.

A lot of people also misunderstood what equity actually means.  For example, one of my friends told me that he is going to suddenly get $500,000 in equity because he is buying a house, and I asked him if he knew that equity means the value of the house minus the amount of debt, and he didn't.  Another couple I know are doing an interest only loan, and they keep on talking about equity to me, too.  It's pretty bizarre because I know they are pretty much just renting the money from the bank. 

Reply

Please keep the comments civil and on-topic. Abusive or inappropriate comments will be removed without warning. By posting here you agree to our terms of use.

The content of this field is kept private and will not be shown publicly.
If you leave a link (include the http:// part), your name will be linked to your homepage.

You may use some HTML for formatting: <strong>bold text</strong>, <em>italics</em>, and <a href="">for links</a>. Empty lines are automatically converted to paragraph breaks.

Or click the link above that says 'enable rich-text' to use the fancy editor.

Captcha
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
1 + 18 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Have more to say? Join the discussions at Wise Bread's Finance and Frugality Forums.

Finance Blogs - Blog Top Sites