If you are applying for any kind of real-estate loan, the application requires that you list all assets and liabilities. The value of real estate owned is an asset, the mortgage balance is a liability.
When I want to raise money for any purpose, real estate or other, either a re-finance or a second mortgage (called a home equity loan these days) is the lowest interest available, and is the preferred method for most smaller investors.
As I stated, a lowering of equity negatively impacts my ability to get credit. I don't believe I ever said it impacts my credit report, which I agree, it doesn't.
Do not confuse "credit report" with the ability to get credit. If income is $50k, no matter how good your credit report, no one will loan $500k, unless you have substantial assets.
Must have been your fingers thinking on their own(happens to me enough). In any event - I 100% agree with your follow-up.
I don't have anything beyond a 1st mortgage on my house and while the additional means of raising money you stated make financial sense, putting my house on the line fills me with terror. I re-fi'd a 30 year down to 15 (should've just taken the 15 years to begin with but oh well) getting a lower interest rate, shortening my overall length by 2 or 3 years and decreasing my mortgage payment. I skim zillow and get daily emails from them and so many people re-fi'd to take money out and lost their homes as a result.