The easiest way to think of equity is as market value - debt. In accounting ,

>Assets = Liabilities + Owner's Equity (OE)

If your home is the asset, then the liabilities are the liens (which I'll simplify to just mortgages) and the owner's equity, which balances the accounting identity. You can think or Owner's Equity as the business owing the owner.

An implication is that OE can be negative. For example, if the Market Value on the asset (the home) is less than the mortgages, then the owner's equity balances the equation. If owners try to sell a home that they're "upside down" or "underwater" on, then the owners would have to take money out of their pockets. If owners are underwater enough (have too much negative equity), they might consider "mailing back the keys" to the mortgage holder.