Now why would you want to do a thing like that? There are some good reasons.

Uses for your equity

Consolidate debt. Refinancing can shift debt from higher interest credit cards (and other revolving credit) to a lower interest home loan. And, if the loan is on your primary residence, the interest becomes deductible from your income tax. Free up equity for investing. Leveraging your equity to invest elsewhere can be a savvy strategy. Use it for a down payment on an investment property. Or some Incan matrimonial headmasks. Or that trip to Europe. Wait, wait, wait. (See above about consolidating debt.)

And the resulting mortgage?
Refinancing and pulling equity out of your mortgage means you will be financing a larger sum. It follows that your monthly payments would increase. But, since rates are low, you could end up paying the same payment as before, with a lower interest rate, and cash in hand. Aha!

 

 

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Equity:
A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage.

It's the portion of your home's value that is actually yours.