Seventy-four percent of homeowners polled for the survey stated there was no problem in borrowing from home equity to finance residential improvements and repairs, while 57 percent believed this was the best reason to use that money. Thirty-one percent of homeowners who earn less than $30,000 per year told Bankrate.com that they felt there was no problem in using home equity to cover ordinary bills, more than triple those who make $75,000 or more. Twenty-two percent of Millennials believed borrowing from home equity to cover household bills is viable, compared to 12 percent of those who are older. Other reasons cited for tapping home equity were debt consolidation (19 percent of respondents) and education expenses (9 percent), with education expenses favored by Millennials.
“The idea that nearly one in six American homeowners views ‘keeping up with regular household bills’ as an appropriate reason to borrow from home equity speaks to how far some households are stretched on a monthly basis,” said Bankrate.com Chief Financial Analyst Greg McBride, CFA. “This further exemplifies the importance of having an emergency fund, so when the unexpected happens—and it will happen—there is a savings cushion to fall back on.”