Definition
Home appreciation is when a property's value goes up over time. As a home appreciates, the homeowner's equity in the property grows.
Understanding Appreciation in Mortgages
Appreciation often comes into play when assessing a home's future value during the mortgage process. Over time, a home's value can increase due to market conditions or neighborhood development. In simple terms, it's like a gradual rise in worth. Example: If your home was worth $200,000 when you bought it, and it's worth $220,000 five years later, it appreciated by $20,000. It's not guaranteed or uniform across all properties; appreciation rates can vary widely. It doesn't mean automatic profit, as selling costs and market fluctuations can impact actual gains.
