Home equity: Difference between revisions
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'''Home equity''' is the difference between [[mortgage|mortgage(s)]] owed on a property and the current [[market value]]. Home equity has a zero [[rate of return]] and is not liquid. Home equity management is the process of putting otherwise lazy idle dollars to work in a liquid, safe, tax favored, way to create an [[arbitrage]]. Arbitrage, simply put, is borrowing money at one rate and earning a higher rate elsewhere. |
'''Home equity''' is the difference between [[mortgage|mortgage(s)]] owed on a property and the current [[market value]]. Home equity has a zero [[rate of return]] and is not liquid. Home equity management is the process of putting otherwise lazy idle dollars to work in a liquid, safe, tax favored, way to create an [[arbitrage]]. Arbitrage, simply put, is borrowing money at one rate and earning a higher rate elsewhere. |
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It may seem confusing but when you swallow it all it is quite refreshing. |
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Revision as of 02:52, 28 April 2007
Home equity is the difference between mortgage(s) owed on a property and the current market value. Home equity has a zero rate of return and is not liquid. Home equity management is the process of putting otherwise lazy idle dollars to work in a liquid, safe, tax favored, way to create an arbitrage. Arbitrage, simply put, is borrowing money at one rate and earning a higher rate elsewhere.
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It may seem confusing but when you swallow it all it is quite refreshing.