You shouldn’t use your house to help pay your monthly bills, but nearly 1 in 6 American homeowners thinks that’s just fine.
Those were the findings from a recent survey by Bankrate.com. Earlier this month, the personal finance website took an online poll of 719 homeowners, asking them about using their home equity — the market value of your abode minus the outstanding loan you have on your dwelling.
Though nearly 75 percent of participants said that improvements and repairs were “good uses” of home equity loans and lines of credit, many felt that they could tap value of their house for a range of other uses.
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For instance, about 15 percent of the participants said that paying regular household bills was also a “good use” of home equity — a potential signal of financial distress.
“It’s a reflection that money is tight,” said Greg McBride, chief financial analyst at Bankrate.com. “Home equity is often viewed as found money during times of financial strain.”
Here’s what you need to know about tapping your home’s value and the right way to do it.