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Home Equity Index

Home Equity Index is an economic index showing real estate volume owned by mortgage holders. The feature of such home equity is a constant growth of its value over the course of making credit payments. More often, mortgage agreements are concluded for the term 15 or 30 years. Only upon full redemption of mortgage loan, real estate becomes property of a pledger, that is to say, a buyer.

Although, until mortgage is redeemed, each payment just increases the host of home equity, which works against a buyer. Of course, the house cannot be sold until loan is fully paid. The money given as credit work against a buyer, because as collateral value grows, percentage increases.

Thus, home equity represents current market value of the house excluding outstanding remain of mortgage loan.

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