Without selling or borrowing, the increase in value that equity represents is just a number, and a pretty worthless one, at that. As with the value of stock, the value of a house's equity only exists on paper. In order to turn equity in a home into real money, you need to sell the house or take advantage of it in some other way.

Listed below are a few ways that you can turn that figure into genuine, useful cash:

• Move to a more affordable or tinier house - Tinier homes require less maintenance and have more affordable property taxes due to the lower value. You can sell your existing home, move to a less expensive home and keep the difference in price. In some areas, moving to a cheaper home accordingly means relocating to a smaller home, but for retirees or people who are near retiring, this might be an ideal decision. The equity isn't subject to taxes when you move, on the condition that it is less than a quarter of a million dollars and you have owned the property for at least two years.

• A Reverse Mortgage - The financial institution is reimbursed when you sell the house or die. With a reverse mortgage, you are lent cash based on the market value of your home and you can take it as a lump sum or monthly payments. A reverse mortgage is perfect for retired people, since you must be 62 or older to qualify. If your residence is worth less money than the loan amount at the time the property is sold, you may not be compelled to pay back more than the value of the house.
• Equity loan - In areas where housing prices are still appreciating, you can borrow money to upgrade, add a game room or a putting green, and subtract the interest from your income taxes. This type of funding is not really "taking out money", since you need to pay back a home equity loan. You may also apply for a home equity credit line, which allows you to repeatedly borrow and repay according to your desires.
• Move to a less expensive neighborhood - If you are willing to move quite some distance, you may be able to get a house of the same or even larger size while still extracting value from your existing house. If you live in Southern California, moving to Abilene will almost certainly allow you to keep a large residence and equity. Packing up and driving away to save money is not for everyone, but if you are set on cashing out, it is a good way to do it.

All it takes is a bit of creativity to extract the value out of your house. In the current market, there are a few ways to take advantage of the swiftly rising housing prices. The house belongs to you, and you may do with its value as you wish.