You replace your current mortgage with a new, larger one, and take the difference in cash. This can be strategic if current interest rates are lower than your original mortgage rate. The "Usable Equity" Rule
You receive a lump sum of cash with a fixed interest rate and repay it over a set term, such as 15 years. This is ideal if you know exactly how much you need for a down payment on a new home. buying home with equity
This works like a credit card secured by your home. You have a "draw period" (often 5–10 years) where you can borrow as needed and pay only interest. It offers flexibility if you are buying a fixer-upper and need funds in stages. You replace your current mortgage with a new,