Do you want to remodel your living space, add a pool to your garden, or enhance your kitchen? In Dubai, a lot of homeowners are unaware that they can use the equity in their homes to pay for repairs and upgrades.
Even though they can be expensive, home improvements can significantly alter the way your house feels and looks. In some cases, a home upgrade or renovation can considerably raise the value of your house. You can raise the money for this by releasing equity from your property, whether you just want to redecorate or have a bigger ambition for your house, like adding a private pool or an outdoor pizza oven.
What is equity release?
Equity release is when you free up, or release, cash from your property by borrowing against its current value.
As an example, let’s say you purchased your property five years ago and you have been paying off the mortgage consistently since then. Furthermore, the market value of your property has also increased during this time. This means you will have built up some equity in your property – as the property is now worth more than the original amount (capital) used to purchase it.
Why consider equity release for home improvements?
Saving the money needed to pay for home improvements can be difficult and expensive. Some homeowners decide to obtain a personal loan to assist in paying for such repairs. Although this is a possibility, it would be wise to research and contrast the terms of an equity release with those of a personal loan. Equity release over a personal loan also makes it simpler to maintain control over your finances because you are limited to borrowing from one lender and one financial instrument with just one monthly payments.
Since they have a stake in the property, banks are frequently more likely to allow equity release for home repair purposes.
Finally, it’s important to keep in mind that certain home upgrades can significantly raise your property’s value and make it stand out more if you ever decide to sell. This means that in some circumstances, even if you release equity for a home repair or improvement, the value added to the property when the project is finished may be far greater than the amount released to fund it. Even though you won’t realize this value until you sell the property, it’s still important to keep in mind.
