If you own your home, it's likely the most valuable thing you own. You should take care to protect your home and its equity, just like you would protect anything valuable. Equity is just the difference between how much your home is worth now and how much you still owe on it. For example, if your home is worth $200,000 and you owe $150,000 on your mortgage, you have $50,000 in equity.
Equity Grabbing: "Equity grabbing" is one of the most common cons. In one case, a homeowner might be persuaded to cash out most or all of the equity in their home in exchange for a big check at settlement. The borrower might be excited about getting all that money at once, but they might not be able to afford the monthly payments that come after that big check. This could cause them to lose their home.
Contractor Scams: A housing contractor is another person who can try to steal your equity. The contractor may call you and offer to do home improvements for a price that seems good. If you say it sounds good, but you can't afford it, the contractor will send you to "a lender he knows" to get a loan for home improvements. This loan may start out with payments you can afford, but after a few months, the "teaser" rate could change to something you can't pay. Make sure you read all the small print and don't sign anything that needs to be filled in later.
3-Day Right of Recision: All borrowers have a "Right of Recision" that lets them cancel a refinance loan on their main home up to three days after the loan closes (only Sundays are excluded). You have that right no matter what, so don't be afraid to use it if you think something is wrong.
