Basically your bank will loan you money based on the value of your property. There are loan ratios so lets say they have a 10% ratio (I think thats normal although others demand more or less depending on the area). That would mean you can borrow up to 90% of the value of the house. If the house is 100K you could borrow 90K. Now if you only owe 50K because you bought it a a few years back and it has gone up in value then your bank will lend you up to the 90K (or an extra 40K) for you to do whatever you want with. Its a cheap way to finance debt for purchasing things like cars, holidays, extensions…than using a credit card or personal loan BUT it means you are putting those things under your home loan and if you dont or cant pay then they reposses your home. You would start by going to your bank and having the home valued by a professional they recognise to see how much you could borrow. A good bank will pay for this service for you as long as you take out a loan with them. You generally set up a new loan (which means a new fee) and then your back to normal. Your home loan repayments will go up but they should be able to calculate these for you so you know what to expect. Remember interest rates are on the rise so factor that in. Happy spending.

Equity is the amount of principle you have payed on your home..This does NOT include monies paid toward the interest of the loan

What would be the cashed up value of your home. You can take a loan on the paid up value of your home after some form of assessment. The loan can be used to improve your home, or for holidays, etc.

equity is the value of your house minus any loans you have secured on it. Negative equity is when you owe more than the value of your house positive is the opposite

Equity is usually the term given to the value of the money when the price of a house increases. For example:

If you purchase a house for £100,000 and then in six months it is worth £150,000 there is £50,000 worth of Equity in it.

However you can also get "Negative Equity" where the value of the house drops. This can be very bad if the value of you house drops below the amount of your mortgage.

Equity is how much value is left on your home after you deduct any mortgages or liens. The only ways to gain equity are to pay down on the balance you owe on the home and to enlarge your home. Some home improvements help, but ultimately size really does matter. If you increase the square footage of your home, your appraiser can then compare the value of your home to larger homes sold in your area, thereby increasing your appraisal/equity.To come up with a value of your home an appraiser must inspect your home, and find at least 3 (At least in my area) homes that have sold in the area (5-10 miles) within the last year..he can then obtain a value.

Basically, as everyone mentioned, Home Equity is the value of your house minus the mortgage and other debts (liens) you have against the house. So a $500,000 house with a $200,000 mortgage would have $300,000 in equity. Now to give you more details, you can always get a home equity loan or line of credit from the bank. I would recommend a line of credit. Most banks offer at least 90% of the equity you have, and some go up to 100%. Make sure you never pay any fees for this line, especially upfront costs or points. Now the bank will pull your credit, check your expenses (debt to income ratio), appraise the house according to comparables in the area, and then tell you how much room they can give you. The benefit of this is that some banks, Wells Fargo being one, allow for you to have a line of credit and fix a portion of it so you can have a fixed rate on what you initially use. The remaining untouched amount will always be available with a variable rate. The home equity rates are not as low as first mortgage rates because the lender is taking second position on the property but it is still lower then any other loan or line you can get. Most home equity loans or lines are closely tied to the prime rate in the wall street journal. Now to answer your other question, you can use your home equity for anything you please. The most common use is to do home improvements but many people use it to pay off their credit cards, pay off auto loans, use as a down payment to purchase another property, use for investments, energencys, and so on. The main benefit is that in most cases, the interest is tax deductible compared to a credit card where the interest does no good for you. Also, I don’t advise you to do this with a broker because they charge for it, where as most banks don’t charge any fees and even pay for the appraisal and recording fees and everything. The only fee banks have is usually a pre-payment penalty if you close within 3 years, and that’s usually standard.