Too many people think it's OK to tap home equity to pay monthly bills

One in six homeowners in a new survey believed that it's OK to tap home equity to pay monthly bills — an attitude that sets financial planners' hair on fire.

Such thinking was most prevalent in the poll of 1,000 people among the lowest earners, less educated respondents and millennials.

Face reality

“If you are using your equity to pay your first mortgage or your utility bills, then that house is probably too expensive for you. That approach can’t last forever,” warns Andrew Weinberg, a principal with lender Silver Fin Capital Group in Great Neck.

Remember, if you can’t pay the money back, you can lose your home.

Turn to other alternatives

“Start doing a budget and sticking to it, and prioritize getting out of debt instead of going further into debt,” says Miller.

Build an emergency fund of at least 3 to 6 months of living expenses, so you have a cushion.

Consider your home sacred.

“When you’re nearing retirement and you need your equity the most, you’ll be tapped out," says Jared Weitz, founder of United Capital Source, a small business lender in Great Neck.

"There are many more sources for credit and personal loans today. Companies like Upstart, SoFi, LendUp and LendingClub can help bridge the gap during an emergency. Your home equity should be saved for retirement and looked at as a nest egg.”