In short, Levergaing is a way to get more cash than what you acctually have, that means financing yourself with loans for investment means.
But, Refinancing Mortgages has brought a new way of leveraging: using your current property in order to get extra cash. This is very risky since you end-up owing more than you have, that is especially when you invest your cash unwisely.

In this  article we will look at 2 refinancing options:

• Cashing Out
• Home equity loans

Caution! using your property for investments or levergaing requires asset-liability management, that is managing the risks associated with loaning and investing money. Financial institutions devote many efforts &  resources to this practice, hence a person that think he can practice asset-liability management all by themselves are bound to lose money.
Try using the leveraging as a mean to invest in yourself and your property. Home-improvement will make your property value higher, and can reward you if you decide to “cash-out” and sell your house / cover your loan.

Cashing Out

Cashing out is receiving extra cash for your original loan different purposes. in other words, you refinance your loan for more than you currently owe. Here’s an example:
you still owe 100,000 $ on a 200,000 $ worth property. When you refinance you cover the balance and burrow a new 125,000 $. The Difference (25,000 $) is yours to invest as you please, and we’ll be paid as part of the new loan.

Home Equity Loans

Home equity loans in different since after taking one your will have 2 loans on your property: the mortgage and the original loan.
Equity is the part of your propety you acctually own: the house’s appraised value minus the amount owed to the lender. Based on this differencem you may recieve a new loan called Home Equity Loan.
The idea is like cashing out – you use the “already owned” part of your house to increase debt for different purpose.
Here, we focus on refinancing, so we won’t explain home equity to the max, just know that there are 2 kinds of these loans: Home Equity (similar a second mortgage) & HALOC (home equity line of credit).

We basiclly believe that cashing on your property is equivilant to breaking a savings account. While doing so as part of home refinancing – you may end up paying more than you originally intended.
So, think of this option as a most unwise and last resort, and if at all try using it for home-improvement purposes and never as a mean to get cash for stock or speculant invetment.