Julie bought a house for $315,000 and has a $285,000 mortgage. She claims she has $315,000 in equity. Is she correct? If not, how much home equity does she have? Explain.

In simple terms, the word "mortgage" is an account payable in which your house is the collateral. The asset acquired for the house is $315,000 but this value should be subtracted with the mortgage amount, $285,000 to calculate for the equity.
equity = $315,000 - $285,000
= $30,000
Thus, the home equity Julie has is only $30,000.

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abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2021-11-08T07:47:15-05:00

Based on the information given the equity amount that Julie stated is not correct, Julie equity amount was supposed to be $30,000.

Using this formula

Equity=Value of building -Mortgage

Let plug in the formula

Equity=$315,000-$285,000

Equity=$30,000

Based on the above calculation Julie equity is not $315,000 but $30,000 as she was supposed to deduct mortgage amount of $285,000 from $315,000 which is the value of the building.

Inconclusion Julie equity is $30,000.

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