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A: Home equity is a concept; you can’t physically see or touch it, but it’s there. Equity is the part of your property you don’t owe the bank for, the more you have the more your net worth enhances. Home equity matters because it’s commonly used as a means to pull money from, and it provides security for lenders’ loans.

Imagine grandma owning a home free and clear and the fair market value is $100,000. When she passes away you inherit it. You have just inherited a 100 percent equity home, plus a headache if you have siblings she didn’t include in the trust. Now say before grandma’s passing she funded an around the world cruise by pulling a home equity line of credit for $20,000. Once she passes and you inherit the home your equity is now $80,000. Thank you, grandma.

Want to increase your home equity? Here are three tips: 1. Repay your loan. Pay off your loan balance and your equity increases. 2. Remodel. Like anything looking worse for wear give it an update, start in your kitchen or bathrooms. 3. Hold out on selling. You can build equity just by being in a healthier real estate market.

Zara Rowbotham,MBA, Vanguard Properties, (415) 418-8865,