Theresa just bought her first new home. She put 30% down and got a mortgage for the remainder. The difference between what Theresa owes and what her home is worth is known as what?

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Social Studies

Sebastian Thomas

19 May, 20:05

Theresa just bought her first new home. She put 30% down and got a mortgage for the remainder. The difference between what Theresa owes and what her home is worth is known as what?

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Madison · Answer 1

The correct answer is Equity

The concept of equity comes from basic accounting and its understanding can be very useful for the performance of a portfolio of financial investments. Thus we can say that equity, is the result of subtracting the value of assets minus the amount of all liabilities of a company. Although the concept of equity is widely used in corporate balance sheet analysis, this idea can also be applied to an investor's personal finances.