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Estimate Home Values with Online Calculators

By Karen Lawson
Home Worth Columnist

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The relationship between home value and home equity is useful in determining how much you can borrow when refinancing or taking out a home equity loan.

Basically, the dollar amount of your home equity is the difference between your home's present value and how much you owe in mortgage loans. In today's volatile real estate markets, maintaining a cushion of home equity may help you avoid problems that can develop if your home value falls below the amount you owe on mortgages.  

Using a Home Value Calculator

Free home value calculator tools are widely available online.  You can get an idea of home value based on market trends in your area and other information that you enter into the calculator. It's important to remember that calculator tools are designed to very roughly estimate home value. The results from a home mortgage calculator may differ from the value determined through an appraisal of your home. Mortgage lenders typically require a formal appraisal, which involves a licensed appraiser's thorough inspection of the interior and exterior of your home. Appraisers also research local market trends and make comparisons between your home and similar homes in your area to determine your home's value.  

Home Equity and Regional Market Trends

Refinancing and home equity loans can provide cash at relatively low interest rates, but it's important to consider not only the purpose for using home equity, but also any potential  implications associated with changing real estate markets. Of course, no one can completely predict future home value trends, but many areas are presently experiencing a "cooling off" of  formerly hot" housing markets. A home value calculator can help provide a general idea of how much your home is worth.

About the Author
Karen Lawson is a freelance writer with extensive experience in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.
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