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.

The study was conducted online in using a probability-based panel designed to be representative of the US general population, not just the online population. If the results held true for the country, it would mean 24 million homeowners believe home equity can be used for ordinary costs.

While it’s not unusual for people to tap their home equity to do a major renovation, or costly repairs like a new roof, using such funds to pay regular bills is a whole other matter.

“Tapping into home equity, aka going into debt and putting your home at risk, to pay routine household bills is outright insanity. It’s a huge red flag that your spending is out of control, and is a path to an accelerated downward spiral that will end in foreclosure and maybe bankruptcy,” says Beverly Miller, a financial coach in Pittsburgh.

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.”

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