We all know it has to do something with banks and properties. And in this article we will try to describe equity and answer your questions you might have about it:
* Simply said, equity is a financial term used to describe the value of money that a specific person would potentially be eligible to if they were to sell a property and settle all the mortgages, loans and money borrowed against this specific property.
* Equity is a financial term calculating the total assets left after subtracting the total liabilities.
* Equity is also the difference between property value and what the owner owes against that property in terms of mortgage or loans.
* Equity could be released if a person goes bankrupt. In this scenario, the property is sold on the market and the mortgage and the loans are subtracted from the total value received. The person is granted what is left from the money.
* Equity release could be done via IVA (Individual Voluntary Arrangement). In the IVA scenario a person will continue to do monthly payments that cannot go over the maximum that the person could afford to pay. The period usually stays the same and part of the debt/mortgage could even be written off.