Single vs Joint Mortgage in the UAE: Which is the best way to get?

In buying property in UAE, a very critical choice is made by many buyers who are under the question whether to apply individually or in consortium to get a mortgage.

Although both opportunities exist, the correct option is determined by the financial organisation, strategy in the long term, and the plan of borrowing. The knowledge of the differences will enable the buyers to make better decisions before making an application.

What Is a Single Mortgage?

One mortgage is bought under the name of one individual. The bank only evaluates the incomes, liabilities, credit history, and the employment stability of that individual.

There is one situation in which a Single Mortgage can be an excellent idea:

• One individual has adequate income to meet.
• Financial autonomy is desirable.
• Purchasing the property on a case-by-case basis.

With a single mortgage, the financial responsibility remains easy to deal with, only that solely on the basis of one source of income.

What Is a Joint Mortgage?

Joint mortgage is an application where two applicants, usually, spouses, family members or business partners, apply jointly. The bank takes a combination of their incomes (requested by the policy) to decide eligibility.

The reasons why Buyers prefer Joint Mortgages:

• To expand the borrowing power.
• To be eligible to properties of higher value.
• To harmonise budget accountability.

Joint mortgages can enhance granting of mortgage where a single income is insufficient.

Major Distinctions between Single and Joint Mortgages.

1. Borrowing Capacity

With joint applications, there is usually high loan eligibility since combined incomes are taken into account.

2.Liability Responsibility

In a joint mortgage, both parties have a legal obligation to repay it even when there is a change in one of the incomes.

3.Risk Distribution

In case an applicant is financially unstable, the income of the second applicant can sustain the stability of repayments.

4.Future Financial Impact

The joint mortgages can have impacts on future loan borrowing capacity of the two applicants.

There are several considerations that are important before making a decision.

There are several aspects that buyers should take into account before making a decision:

• Financial stability in the long run.
• Career growth plans
• Existing liabilities
• Future investment goals
• The property ownership is legal.

Joint mortgage also raises the opportunity - although responsibility is shared.

Common Misunderstandings

Most customers are of the view that joint mortgages automatically increase borrowing power. In reality, banks evaluate:

• Combined income
• Individual debt levels
• Credit report of the two applicants.

When an applicant has a low credit history, it will affect the whole application.

Which Option Is Better?

There is no universal answer.

Single mortgage is independent and has easiness on liability.

A joint mortgage has greater flexibility and affordability.

The correct choice is not necessarily based on the eligibility, but on financial aspirations and future planning.

Final Thoughts

It is not just a technical choice to make; it is a strategic financial choice one has to make between single and joint mortgage.

Learning about the impact of every structure on the borrowing capacity, responsibility, and future planning will assist buyers to make informed choices that will help them meet their long-term plans.

Planning mortgage is not only about being approved but to plan it in the right way at the beginning.