Julio has a house worth $220,000. He has a $175,000 mortgage. Julio says that in this situation, his asset is really only $45,000. Which statement explains whether Julio is correct? A. Julio is correct because the $45,000 equity in the house is the real asset. B. Julio is correct because he can pay $45,000 and have no more liabilities. C. Julio is not correct because the same item cannot represent both an asset and a liability. D. Julio is not correct because the house cannot be worth more than the mortgage.
He owes 175000, but the house is worth 220000 Equity (or an asset) is equal to how much something is worth minus how much you still owe