I’m sure you’ve heard that home ownership builds wealth. Have you ever wondered what exactly home equity is and how it can enhance your total assets? Here’s a quick explanation to help you out.

Home equity is the current market value of your home, minus what you owe. When doing out the math, you’re looking for a positive number. Quite simply, home equity is how much you truly own of your home. Your properties equity increases as you make payments against the mortgage balance, and/or as the property value appreciates: when your home gains value because of improvement projects or a healthy real estate market. Building home equity is a long-term proposition, but the end result is so worth it.