You build equity in your house every time you pay down your mortgage or home values rise in your area. And when you sell the house, that equity translates to profits in your pocket.
While you still live in the home, you can borrow against your equity too, using tools like home equity loans and home equity lines of credit (HELOCs). Not to be confused with refinancing, these are both types of second mortgages that you take out in addition to your original mortgage loan — and they can help turn your equity into cash when you need it.