Question

Martha and Gordon purchased a home for $175,000 six years ago with a 5.5 percent, 30-year $140,000 mortgage. Their home now has a market value of $210,000 and they owe $134,000 on the mortgage. What is the equity in their home? A. $76,000 B. $70,000 C. $45,000 D. $41,000

Answer 1

Answer:

The correct answer is A that is $76,000

Explanation:

Home equity is the market value of a home owner un-mortgaged interest in the real property, which is the difference among the home's fair market value and the outstanding balance of all liens on the property.

So, it is computed as:

Home Equity = Market value - Outstanding balance

= $210,000 - $134,000

= $76,000