You might be someone whose had your mortgage for years. Your interest rate is low and your payments are manageable. But you, like most of us, could use a little extra cash.

One day a lender calls and asks if you’d be interested in refinancing. He/she mentions the possibility of freeing up some extra money, and the opportunity to start making your hard earned equity “work for you.”

So you sign the papers to refinance. Some time goes by and you make a few regular payments on the loan. But the lender calls back with another offer.

This time the lender asks if you’d like to refinance your original loan for a larger sum of money. You’re thinking about that vacation you’ve been wanting to take. You agree to go ahead with it.

This technique, called “flipping,” occurs when the lender charges you higher points and fees each time you refinance while also maintaining the likelihood of increasing your interest rate. In addition, if a prepayment penalty exists, you will have to pay that amount each time you take out a new loan.

After you’ve gone through this cycle, you have some extra money and also a lot more debt, which is drawn out over a much longer period of time. Sometimes the extra money you receive is actually less than you paid for the fees involved in the refinancing. You’re paying interest on the fees themselves.

Overall, with each refinancing, your debt increases, and you end up paying an unreasonably high price for a little extra cash. And if you begin to fail making payments, you will face foreclosure and the loss of your home.