What is the term for the difference between the value of a home and the total amount of any liens against it?

The term that signifies the difference between the value of a home and the total amount of any liens against it is known as equity. Equity represents the ownership value that homeowners have in their property after accounting for any debts associated with it, such as mortgages or other liens. For example, if a home is valued at $300,000 and the total amount of liens against it is $200,000, the equity in the home would be $100,000.

Equity is an important concept in real estate as it can impact a homeowner's ability to refinance or obtain loans, and it reflects the financial stake and potential profit that a homeowner would realize if they sold the property. The other terms do not capture this relationship effectively: a mortgage is a type of lien; the capitalization rate is a metric used in real estate investment to evaluate the profitability of income-generating properties; and net income refers to money earned after all expenses have been deducted, primarily applicable in business contexts rather than directly relating to the value of a home.