What does it mean "taking out home equity"?

When someone says "I'll keep this house for a long time to build equity, then I can take the equity out to buy a car (or whatever I want.)" What is that mean? What does it mean by "taking the equity out" (from your home). Thanks!
Update: What you said "If you have enough equity you can refinance the house for a higher amount and take out the difference in cash" - that cash - it's yours or you have to pay it back? lol
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