Equity in a home does not make you any money by just sitting dormant. In fact, if the value of your property decreases, your equity is lost. By cashing out the equity in your home and placing the funds in an investment with a higher rate of return than your mortgage interest rate, you will make money from the equity in your home.
Lenders provide money to people who need capital. They charge interest, but you don't have to make the assumption that interest is your foe. Many major corporate and financial institutions use debt management to accomplish their goals, even though they may have plenty of assets earmarked to cover their liabilities. Debt can be a wise and prudent money-managment tool.
It's easy to see if a bank can borrow money from the Federal Reserve at 4 or 5 percent, and then turn around and lend that money at 8 percent, they can make a handsome profit, especially on large sums. By separating the equity from your home, you can accomplish the same thing.
