Why you might want to consider including your spouse on your mortgage in the UAE

There are various home loan products available in the UAE to suit different buyers and their particular requirements. As a potential buyer you will almost certainly want to shop around for the best deals to suit your long-term plans, but there are other aspects you might also want to consider when taking mortgage in the UAE.

Purchasing a property is one of the largest investments most people will make in their lives. It is important that you understand all the facts about the property you are purchasing and any finance you are taking to facilitate that purchase.

One area where we seem to notice a gap in knowledge on the part of our married clients is regarding the benefits of including both husband and wife being on the mortgage application.

Making things clear

Contrary to popular belief, in the UAE a co-applicant does not necessarily need to provide proof of income. In fact, they don’t have to be working, just as long as the main applicant has shown they can afford the mortgage payments long term on their single income.

Our mortgage calculator is a useful tool in helping you understand what your monthly mortgage repayments could look like.

What are the benefits?

Dubai and the UAE operate under Sharia Law, in countries which do not operate under the same legal system there might not be a benefit in including your spouse on your mortgage if they are unemployed, or if their income does not make a difference to the mortgage amount required to purchase the property. However, in the UAE, Sharia Law states that where a husband passes away his monies / estate are to be given to his male relatives, this would include any property that he owns solely.

As an example, let’s take a husband who technically owns the property, but his wife is not on the mortgage. If the husband were to suddenly pass away, under Sharia Law monies from any sale of the property would be distributed to his male relatives. His wife may only receive a small percentage from any sale. From an estate planning point of view, if the husband and wife were 50/50 owners of property and if something happened to the husband, then at least the wife is still a 50% owner of the property and would therefore be entitled to 50% of any sale.

Banking note

It is worth noting that when a person passes away in the UAE, their accounts are frozen until all debts are paid. In regard to any bank account including joint accounts, a court will decide who should inherit the funds. UAE law defines a joint account as one owned equally by each of the signatories, unless they agree to split it differently.

Making a will

In addition to having both husband and wife on the mortgage, it is worthwhile for both parties to make a will registered in DIFC, which will then fall into Common Law. Your mortgage broker will be able to advise you on how to get assistance in doing this, in order to avoid any potential issues later down the line.

Making that all important decision

It all comes down to personal decisions which is why potential buyers should take all the best advice and do as much prior research as possible before embarking on the mortgage and buying process. What may seem simple or cheaper now could lead to problems for a spouse later on if the correct plans aren’t put into place.

It may seem a morbid subject but is one that should be addressed, and the correct actions taken as purchasing a property is a great investment and it is important to ensure you have measures in place to take care of life’s unplanned life situations.

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