After losing his job, getting divorced and facing nearly $50,000 in credit card bills and student loans, Ed Derdzinski bet the house.
"It just seemed like a perfect time for me," he says. "I was kind of, like, starting over."
He refinanced his $105,000 Minneapolis-area duplex six years ago, then went back for refinancing three more times. He paid off his debt and pocketed $100,000.
But the price has been high. He now owes $323,000 on the house and has very little equity. Derdzinski says he knows it's all a gamble.
"If something goes wrong you're going to be in a position where you could lose your house," he says. "At the same time, this country was built on entrepreneurship."
These days it's much easier to get a loan, and with red-hot competition, homeowners are bombarded daily with pitches to cash in.
"People can borrow far more money than they can reasonably repay," says banking expert and Harvard Law School professor Elizabeth Warren.
Refinancing in America skyrocketed 35 percent from 1993 to 2001, but from 2000 to 2003, foreclosures also climbed 45 percent. Many economists suggest that with volatile real estate and money markets, pinning all of your financial future on your house isn't much different than taking a spin at the local casino.
"There are people in this world who want to take that kind of gamble, but that's not what most Americans want to do with the place they live," says Warren.
And the high stakes don't stop with loans. A recent study by October Research shows 55 percent of appraisers say they've felt 'uncomfortably pressured' to overstate property values, and 46 percent of those say they were asked to inflate the value by 11 to 30 percent.
So if you're planning to refinance, the advice is: Don't go overboard, or else your home could become a house of cards.