What is Equity Release?
Equity release refers to a financial product letting you access the equity (cash) tied up in your home if you are older, jobless, retired, or need a second stream of income with a well-protected cover of your home.
Equity release products are sorely needed in an aging population and expats in GCC. Particularly when we see Dubai and Abu Dhabi Markets a house is a great sign of relief once paid off and related visa benefits achieved. Due to uncertainty in the linked job market, the full payment on 20-25 years of mortgage is a long story and the biggest threat to the largest expat community is to survive the interim bad period of financial difficulty to sustain with the installment’s payments, at least till the time a new job is obtained. Though UAE nationals also have cashflow challenges during the mortgage tenure, starting from children’s annual fees, marriages, and other social objectives where higher cash flow is required for a certain time to cope with specific problems.
Equity Release transforms Immovable Fixed Assets in owner-occupied dwellings into liquid assets for the second stream of income. Thus, it enables a homeowner to access the wealth accumulated in the form of his or her home, while being able to continue to live in it. An illiquid asset becomes a source of liquidity, mainly for the new stream of income purposes.