Question 1

What is the difference between gross equity and net equity?

Accepted Answer

Gross equity is the current estimated market value of your home minus outstanding mortgage debts. Net equity subtracts necessary transaction fees, such as agent commissions (typically 5-6%) and escrow/title fees (typically 1-2%), showing the actual cash you would walk away with after a sale.

Question 2

How does Loan-to-Value (LTV) affect my options?

Accepted Answer

LTV measures your total mortgage debt relative to your home's value. An LTV below 80% generally permits conventional refinancing and makes selling straightforward. An LTV above 80% restricts refinancing or subjects it to PMI, while an LTV over 100% means you are underwater and may require a short sale or modification.

How much would I actually walk away with?