Final answer:
The value of an owner's holdings in real estate over and above any liens against it is known as equity. It represents the owner's ownership interest in the property after deducting any outstanding mortgage or loans.
Step-by-step explanation:
The statement is true. The value of an owner's holdings in real estate over and above any liens against it is known as equity.
It represents the owner's ownership interest in the property after deducting any outstanding mortgage or loans.
In other words, it is the difference between the market value of the property and the amount owed on it.
For example, if someone buys a house for $200,000 with a down payment of $20,000 and takes out a mortgage of $180,000, their equity in the house would be $20,000.
As they pay off the mortgage over time and the market value of the house increases, their equity in the house will also increase.
Equity is an important financial asset for many homeowners as it can be used to build wealth and can serve as collateral for loans.