FinanceIntermediateDelaware Exam
In Delaware, what does 'equity' in real estate mean?
AThe mortgage interest deduction available to homeowners
BThe difference between the property's market value and the outstanding debt against itCorrect
CThe homeowner's credit score times the property value
DThe amount of the initial down payment only
Why The difference between the property's market value and the outstanding debt against it Is Correct
Answer B: The difference between the property's market value and the outstanding debt against it
Equity is the owner's financial interest in the property — the difference between the property's current market value and the total amount of all liens (mortgages, etc.) against the property.
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Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
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