Cashing out your home
According to this San Francisco Chronicle story, with the average house having appreciated in value by 44% in the last five years (and homes in the East and West Coast major cities having appreicated up to 80% during the same time period), cashing out equity and lines of credit are increasing rapidly:
New research by mortgage giant Freddie Mac found that 60 percent of all refinanced mortgages the corporation purchased during the third quarter of 2004 involved cash-outs, where homeowners increased the size of their loans and pocketed the difference tax-free. That 60 percent figure was up from 42 percent during the second quarter and represents the highest rate since mid- 2002.
In hard-dollar terms, American homeowners converted $41 billion in real estate equity into spendable cash in the third quarter alone, up from $28.5 billion during the second quarter. For the year as a whole, Freddie Mac estimates that homeowners will cash out $118 billion of their home equity.