A buyer paid $460,000 for the house.
The lot was valued at $65,000.
The mortgage was for $200,000.
After all is said and done, how much equity does the homeowner have in the place ?
First of all, the value of the lot has nothing to do with the calculation, so let's hope you don't figure it with eithyer a simple mathematical addition or subtractioin.
Therefore, let's just subtract the value of the loan from the cost of the home (460k-200k) and we see that we've got $260,000 in equity in the house.
Remember, the market value of the house minus the amount remaining on the mortgage is the equity.