Equity

Equity Meaning:
Total assets minus total liabilities. This is what shareholders in a company own, and what homeowners have when the outstanding value of their mortgage loan is subtracted from the current value of their home.

Equity Example:
Itís possible for equity to be negative. Homeowners have negative equity when the market value of their home is less than the outstanding value of the loan used to buy it. This usually comes about because of a falling market in property.