Question

Ten years ago, Oanh bought a house for $200,000 in Chico. She put in a cash down payment of $40,000 and took out a loan for $160,000. She has paid down $60,000 of the loan. Now the house has a market price of $400,000. How much "equity" does Oanh have in her house?

Answer 1

Answer:

The amount of equity Oanh have in her house is $300,000.

Explanation:

Equity can be described as the difference between the amount that is owed on a mortgage and the current worth of the home.

For this question, the amount of equity Oanh have in her house can be calculated as follows:

Loan amount = $160,000

Part of the loan paid = $60,000

Current worth of the house = $400,000

Amount owed = Loan amount - Part of the loan paid = $160,000 - $60,000 = $100,000

Equity = Current worth of the house - Amount owed = $400,000 - $100,000 = $300,000

Therefore, the amount of equity Oanh have in her house is $300,000.