Bret Devereaux

Equity is the chunk of something that you actually own, after the assessment of debt liabilities against it. Most often this would be a house. Equity is (value) - (loan still unpaid).

In the case of houses, home owners can generally take out new loans (by refinancing) on that equity value, 'cashing out' the equity. It is an important form of emergency or business-start-up capital for the Middle Class which is broadly unavailable to poorer folks.

And thus a driver of inequality. Basically, you refinance the mortgage on the house by taking a new loan from the bank up to the value of the house (minus some amount), use some of that money to pay off the old loan in one shot and pocket the rest, thus 'cashing out' the equity

But of course also extending the terms of the loan. Generally the smart time to do this is when interest rates are very low, especially if you have a fixed rate mortgage, where you can 'lock in' the low rates.

And now for the Devereaux Family Motto: You should of course always consult a financial professional before making any decisions.

Okay so I just saw a suggestion that property taxes be made payable out of homeowner equity (as a remedy for the displacement of people whose house values have risen until they can't afford the taxes). What would be the mechanism for this? How would you "spend" equity this way?

I think that would mean that the taxes would be paid in the form of a loan against the house? So, the advantage here is that if you, say, get gentrified out and your taxes spike because house value spiked, then you have big equity because it's value-loan and value just went

So the suggestion is that the taxes would be paid by giving the state partial ownership stake in the house. I have lots of questions there - is this stake an interest-bearing loan? Or does the government expect to get paid only on the sale of the house?