Equity is the difference between what is owed and the market value. It can be borrowed against in the form of home equity line of credit (HELOC)
Thank them and be good to your wife.
My sister used to live in Appelton. Very nice area.
It may also help out your in-laws ... depending on the tax situation. Perhaps they will save some capital gains taxes by "gifting" you all or a portion of their gain on the property, especially if this is not their primary residence. We see this happen with first-time home buyers who may have a relative that wants to assist them in their home purchase. Good for you!