Islamic loans are versatile. Some people think incorrectly that these Islamic mortgages don’t have some of the options their more traditional western counterparts do, but nothing could be further from the truth. Once you’ve been paying into one of these loans for a length of time, you will have built up a certain amount of equity that you can draw on for a variety of different projects.
One of the benefits to having equity is the possibility of a reverse mortgage. This is an option whereby the homeowner can take a portion of the money they’ve built up in their home and covert it into cash that usually doesn’t need to be repaid until the home is sold.
This can come in handy for a variety of reasons including:
- Helping a child or grandchild get a good start in life. Whether they need the money for an education or a first home of their own, your equity can become an investment in someone’s future.
- Unexpected medical bills. The money that you can get after you’ve been paying down one of these Islamic mortgages can come in handy if your health throws you a curve and you need some money to pay medical bills.
When you’ve been paying into one of these Islamic loans for some time, you’ll see how an investment in real estate can pay off in a variety of different ways.