As you build equity in your home. Calculate your equity by:
Find out how much your house is worth in today’s market (not how much you paid for it)
Find out how much you currently owe on your mortgage
Subtract what you owe on your mortgage from the current value of your house.
Refinancing allows you to borrow up to 80% of the value of your home minus what you still owe on it. For example, if your property is currently worth $500,000, you may borrow up to $400,000 (80 percent of the value)