For many home owners, their home is their most prized possession. They work hard to pay it off early so they can enjoy it without worrying about the mortgage payment. However, things happen and sometimes those same home owners need to take out a home equity loan to help them through a financial crisis. Unfortunately, some of them get in a hurry and fall for home equity scams that do more harm than good. Following are some brief descriptions of those scams so you know what to look for in case something just doesn't sound right.

Stripping 
Some lending companies encourage you to lie about your income so you can get a home equity loan. Essentially, shady lenders want you to take out a home equity loan that you can't afford so they can eventually foreclose on your home and "strip" you of the equity you have already built up. Beware of any lender that loans you money on your home when they know for a fact that you don't make enough money to keep up with the monthly payments.

Balloon Payments 
Some lenders will give home owners lower payments for their home equity loan in exchange for a huge balloon payment at the end of the loan term. Unfortunately, these balloon payments are not fully explained and they are often hidden in the fine print. The borrower only sees the small payments and figures it's a great deal. When it comes time to make that big balloon payment, though, many home owners simply do not have enough money, giving the lender or bank the option of foreclosing on them. As a result, the home owner loses all of their investment.

Giving Away Your Deed 
Some savvy lenders will convince a home owner in financial trouble that they can help them if they just sign over their deed. Once they sign their deed over to the lender, you may never get the loan they promised. In addition, the lender often takes out a loan against your home or, in some cases, they may have even sold it to another buyer. You're stuck because you no longer hold claim to the deed. This "compassionate lender," however, may treat your mortgage payments like rent so you can still live there. Unfortunately, you no longer have ownership rights and all the money you've invested over the years is gone.

Before getting scammed by a shady lender who doesn't have your best interest at heart, be sure to read everything and don't rush into anything. A little patience is vital to protecting your biggest asset and your largest investment. If you have doubts, contact the Better Business Bureau and other loan companies to ensure that the company you're dealing with is reputable and their practices are normal for the industry. Just remember the adage – if it sounds too good to be true, it probably is.

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