Despite home prices having fallen 2% since a year ago, overall, your home remains a great investment. The typical owner selling today has seen their equity increase by $61,700 since they purchased their home (typically 6 years ago).

This is based on the National Association of Realtors report issued on November 21, 2007. The median home price was $159,100 in 2001 and is now $220,800 (as of the 3rd quarter, 2007).

Having equity gives you great leverage when you refinance to a fixed payment. Normally, if you don’t have enough equity (about 20%), you won’t be able to refinance. This can save you $250-$300 per month on a typical $1,200 payment.

You can also use the cash you receive to pay off bills or to use for major purchases such as home renovation, college - anything you want.

In the latest report, Freddie Mac shows that 87% of people who refinanced in the 3^rd quarter of 2007 took cash-out through their refinancing.Despite the dire news about falling home prices, the average person who refinanced actually saw their home value rise by 26% since they took out their original loan, providing ample equity to take cash out while at the same time lower their monthly payment.