Besides the fact that you are putting your home up as collateral for the new loan, you are also reducing your ability to tap into your home's equity again in the future-at least for awhile.

Individuals choose to access the equity they have built up into their home for a variety of reasons but the most common reasons typically include: purchasing a vehicle, going on holiday, funding education costs, paying for medical treatments, financing major purchases, funding a business start-up or other kind of investment, debt consolidation and home improvements. Of all the reasons to access equity for extra money, the reason that is perhaps the easiest to justify among homeowners, is accessing cash for the purpose of funding home improvements. Many homeowners justify raising the cash for this purpose because the money is being re-invested back into the home and property, which will hopefully further raise the property value.