I always here this a couple of times per year, "We have $500,000 worth of equity in our home, but we only make $50,000 per year.  We want to take out $400,000 worth of equity in a cash out refinance.  Can you help us out?"(The numbers obviously vary, but for the sake of argument, they are somewhat exagerated in this example)

Nope!  I sure can't.  The biggest misconception in real estate lending is that you are not borrowing money using your house as collateral, you are borrowing money against your income.  More specifically, you are borrowing money against your ability to repay the loan back to the bank.  If you were allowed to borrow money against your equity alone, everybody would be taking cash out of their houses right now just to survive (at least those of you who still have equity).

So, when it comes down to it, make sure you are an educated borrower and you understand that you have to have an income to support the amount of money that you borrow.