Real Estate Math
A Pennsylvania property has a $400,000 market value, a $150,000 mortgage, and a $20,000 home equity line. What is the owner's equity?
A$230,000✓ Correct
B$170,000
C$250,000
D$380,000
Explanation
Owner's equity = Market Value − All Liens = $400,000 − $150,000 − $20,000 = $230,000. Equity is the owner's net interest in the property after subtracting all encumbrances. This equity can be accessed through refinancing, a HELOC, or realized through sale. Pennsylvania homeowners with substantial equity have a valuable asset that can be used for retirement income (reverse mortgage), investment, or emergency funds.
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