Borrower beware of 'dead home equity' offers

Q: "I bought a house two years ago that is now worth $340,000, with a mortgage of $240,000. I am being told that my $100,000 of equity is "dead," just sitting there doing nothing for me. How can I make my equity work for me? I don't want to do anything stupid."

A: "Dead home equity," with its implication of opportunity foregone, is a meaningless concept. Home equity is equal to property value less all liens on the house, which in your case comes to $100,000. Calling equity "dead" is a distortion of the English language.

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