Zillow Home Equity Calculator

Zillow Home Equity Calculator

function calculateHomeEquity() { var currentHomeValueInput = document.getElementById("currentHomeValue").value; var outstandingMortgageBalanceInput = document.getElementById("outstandingMortgageBalance").value; var currentHomeValue = parseFloat(currentHomeValueInput); var outstandingMortgageBalance = parseFloat(outstandingMortgageBalanceInput); var totalEquityResultElement = document.getElementById("totalEquityResult"); var equityPercentageResultElement = document.getElementById("equityPercentageResult"); if (isNaN(currentHomeValue) || isNaN(outstandingMortgageBalance) || currentHomeValue < 0 || outstandingMortgageBalance 0) { equityPercentage = (totalEquity / currentHomeValue) * 100; } else if (totalEquity === 0) { equityPercentage = 0; // If home value is 0 and balance is 0, equity is 0% } else { equityPercentage = -100; // If home value is 0 but balance is positive, it's 100% negative equity relative to 0 value } totalEquityResultElement.innerHTML = "Total Home Equity: $" + totalEquity.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }); equityPercentageResultElement.innerHTML = "Equity Percentage: " + equityPercentage.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "%"; if (totalEquity < 0) { totalEquityResultElement.style.color = "#dc3545"; // Red for negative equity equityPercentageResultElement.style.color = "#dc3545"; } else { totalEquityResultElement.style.color = "#007bff"; // Blue for positive equity equityPercentageResultElement.style.color = "#28a745"; // Green for positive percentage } }

Understanding Your Home Equity

Home equity represents the portion of your home that you truly own. It's a crucial indicator of your financial health and a significant asset for many homeowners. Essentially, it's the difference between your home's current market value and the amount you still owe on your mortgage.

How is Home Equity Calculated?

The calculation is straightforward:

Home Equity = Current Home Value – Outstanding Mortgage Balance

For example, if your home is currently valued at $400,000 and you have $250,000 remaining on your mortgage, your home equity would be $150,000. The equity percentage would then be ($150,000 / $400,000) * 100 = 37.5%.

Why is Home Equity Important?

• Financial Leverage: As your equity grows, you may be able to borrow against it through a home equity loan or a home equity line of credit (HELOC) for renovations, education, or debt consolidation.
• Net Worth: Home equity is a significant component of your overall net worth.
• Selling Your Home: When you sell your home, the equity is the profit you stand to gain (minus selling costs).
• Avoiding Being "Underwater": If your outstanding mortgage balance is higher than your home's value, you have negative equity, often referred to as being "underwater." This can make selling difficult and poses financial risks.

How Zillow's Zestimate Relates

Zillow's "Zestimate" provides an estimated market value for your home. While it's a useful starting point, it's an algorithm-driven estimate and not an appraisal. Factors like recent comparable sales, property characteristics, and market trends influence the Zestimate. When using this calculator, you can input your Zestimate as the "Current Home Value" to get an idea of your equity based on Zillow's data.

Increasing Your Home Equity

You can increase your home equity in a few ways:

• Paying Down Your Mortgage: Each principal payment directly increases your equity.
• Home Value Appreciation: As property values rise in your area, your home's value (and thus your equity) increases.
• Home Improvements: Strategic renovations can boost your home's market value.

Use this calculator to quickly assess your current home equity based on your home's estimated value and your outstanding mortgage balance. Remember that the "Current Home Value" is an estimate, and for precise figures, a professional appraisal is recommended.