A mortgage is the largest debt you're likely to ever have and so, in my opinion should be considered more carefully than any other type of debt. This is not something to enter into lightly but it seems that many people are falling into a trap I call treating one type of assett like another.
Your house is a place to live and while there might be times that refinancing or taking out a home equity loan makes sense, you should never treat your house as if it were a bank.
Simply because the value has increased doesn't mean you suddenly found a new source of money. This article at Money.com does a good job of demonstrating how you could get into trouble by treating your house like it was an ATM machine.
"...author of A House of Cards: Refinancing the American Dream, Javier Silva, said that, even in the absence of a real estate crash, many families 'are facing a financial crisis,' partially because they've taken on more mortgage debt."
This next snippet shows how stupid (yeah well I call them as I see them) some people can be. "...Silva says, many mortgage brokers have convinced consumers to cash out equity to buy new cars, boats, or other big ticket items.
"But using home equity that way, he says, 'is extremely risky. You're pulling equity out of your home - that's your family's security. And you're mixing bad credit with good.'"
Credit in general isn't a bad thing but not managing it or being reckless about it certainly is. Even I fell into this trap wanting to refinance my house when interest rates were low and use the extra cash to buy a car. No matter how "savvy" I am when it comes to finances (I got the name Rich for a reason remember), sometimes I need a smack in the face to realize I'm about to make a big mistake. Let this post and the article be your smack. It's my gift to you.