I am completely lost on the concept of buying a home and the selling it before the mortgage is paid. How does this make money/contribute to a new mortgage?
In: Economics
Equity is the portion you own (by paying off your mortgage). Mortgage is the portion the bank owns.
When you sell it, the bank gets paid back first. If there’s anything left, that’s your profit.
The more equity you have, the less there is to pay the bank, so the more profit you get.
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