Parents bought the house I'm currently living in, they purchased it when I was two and trust me this house was a disaster (abandoned party house, previous owner was shot and died in the residence). Parents paid most of the mortgage off at closing and financed the rest, within several years after paying the penny's on the dollar on the mortgage my parents finally finished paying the property off. They had renovated the whole house and adding a detached two car garage. With all renovations made the house appraised for $290,000USD and possibly more with my future plans with adding a second story to the residence (original purchase price: $90,000 or less)...I know there is great amout of equity on the property and parents have never took it out.
My question is how does equity work? Mind yourself that the property is paid off!...is it like a mortgage loan that we have to put/pay back?
My question is how does equity work? Mind yourself that the property is paid off!...is it like a mortgage loan that we have to put/pay back?