Sweat: 1. Perspiration resulting from your participation in the home building/remodeling process of your own new home.

Equity: 1. The difference between the market value of your home and the balance due on your mortgage. 2. Your financial stake in your own home after mortgage liability. 3. Valuable consideration that might be used as your 'option consideration.

Sweat Equity: 1. E = CM2 Energy (yours) Converted to Matter Squared. In this case, Your Energy Coverts Matter into Money (yours) in Equity Form. 2. Equity holdings are YOUR future-funds that may be used as valuable consideration or as your 'option consideration' in lieu of cash. 3. Equity is the amount of money that you either get to use as a result of your efforts or it is the same amount of money that you might have given to a general contractor.

Bottom Line - It is a way to get into a house for very little money, if you're willing to do some work.  The bank will see that you have built a considerable 'option consideration' and in turn consider you a good risk.  This makes for a cheaper interest rate and better terms!