5. Never take money out to pay low interest student loans.
6. Capitalizing on 401k employer contributions is a must. Take money for this to maximize the matching contribution.
7. You should pull cash out for other retirement vehicles that are tax deductible if you need the write off and are in a prudent fund. Always check with your tax adviser before doing anything that is income tax related.
8. You should never hesitate to take your money when a disaster occurs. Survival is paramount. You can always recover and make a comeback, which would include putting the money back.
9. If you have an equity line or second trust deed and can lower the total interest paid between your first mortgage and this loan, or if you can shorten the amortization of the first mortgage by combining both loans, I wouldn't hesitate at all.
The aforementioned 9 items are not the only ones that exist. In an effort to get the message out, I have picked the areas that most people are concerned with.
And now a brief discussion on the gray area. Many people use their equity for investments of all kinds: real estate, stock market, insurance and annuities, their own business, etc. I feel that if you have the knowledge and sophistication, the temperament to ride out the highs and lows, and the youth to have enough time to make up any losses that could come from your actions, then go for it.
I believe that most homeowners are best served by eventually paying their loan off and having a house that is free and clear that would be the cornerstone, as a minimum, of their retirement. Life is not perfect for any of us, and having a house with equity is one of the best things anyone can have. It is always your decision on how to spend or not spend that equity so it is important to keep your financial knowledge current. If you understand how your income flows and how your outlays affect the bottom line, you should have a good financial life. Do not abdicate the final decision on what to do or when to act to anyone. Empower yourself by ruling your own kingdom.