Question

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.

Answer 1

No, she is not correct. She has only $30,000 in home equity. Equity is the value of ownership in an asset minus any debts owed on it. $315,000 minus $285,000 is $30,000.

Answer 2

No she is not. Equity is equal to assets less liabilities. Her asset is the house market value and her liability is the payable mortgage amount of the house.
where
asset = $315000
liability = $285000

Julie's Home equity = asset - liability
= $315000- $285000
= $ 30000