Are you longing to upgrade your kitchen, renovate your living space or install a pool in your garden? Many homeowners in the UAE are unaware that it is possible to release equity from their property which can be used towards home improvements and renovations.
Home renovations can be costly, but can ultimately make a big difference to the look and feel of your home. In some instances a home renovation or upgrade can significantly increase the value of your property. Whether you are looking to simply re-decorate or have a grander plan for your home, such as installing a private pool or an outdoor pizza oven, it is possible to raise the finance for this by releasing equity from your property.
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.
You can read more about equity release here.
Why consider equity release for home improvements?
Home improvements can be expensive and it can often take a while to save the cash required to fund them. Some homeowners opt to take a personal loan to help cover the expenses associated with such projects. Although this is a viable option, it is a good idea to investigate and compare the repayment terms of a personal loan versus equity release. It is also easier to keep control of your finances with equity release over a personal loan, as you limit your borrowing to one lender and one financial product with only one repayment each month.
Equity release for home improvement purposes is something banks are often more inclined to approve since they have a vested interest in the property.
Finally, it is worth remembering that certain home improvements can also dramatically increase the value of your property and help it stand out more, should you decide to sell in future. This means, in some cases, even if you release equity for the purpose of a home renovation or upgrade, the value added to the property following completion of the project could far exceed the amount released to fund it. Although this value will not be realised until you sell the property, it is still worth keeping in mind.
If you are considering a home renovation project and would like some more information on how you can release equity from your property to fund it, get in touch today!