Before loan closing, you have

Substantial equity in the home

No or little equity in the home

At loan closing, you

Owe very little and have substantial equity

Owe a lot, and have little equity

While the loan is outstanding,

You receive payments from the lender - Loan balance rises - Equity declines

You make payments to the lender - Loan balance goes down - Equity grows

At the end, you

Owe whatever amount was borrowed, plus accrued interest

Have much less, little, or no equity

Owe nothing

Have Substantial Equity

Final analysis

Rising Debt-Falling Equity Loan Program

Falling Debt-Rising Equity Loan Product