When a couple decides to end their marriage, the question of what happens to their joint assets, including their home, is a major concern. For many couples, a home mortgage is one of the largest debts they will have to navigate in the divorce process. In Dubai, there are specific laws and regulations regarding joint mortgages and their division in case of a divorce.
- The first thing to consider is whether the property is held under joint ownership or if it belongs to one of the spouses. If the property is held jointly, the mortgage payments will need to be split between both parties until the divorce is finalized. However, if the property is owned by one spouse, they will be solely responsible for the mortgage payments. In either scenario, the mortgage will need to be addressed during the divorce settlement.
- One option is for both parties to sell the property and split the proceeds. This can be a good solution if neither party wishes to keep the property or if they cannot afford to maintain the mortgage payments on their own. However, if one spouse wishes to keep the property, they may need to buy out the other spouse's share of the home. In this case, the value of the home will need to be assessed, and an agreement will need to be reached regarding the buyout amount.
- Another option is for one spouse to remain in the home and continue to make the mortgage payments. This can be a good solution if the couple has children and wants to maintain stability for them. However, the spouse who is not living in the home may still be liable for the mortgage payments if their name is on the mortgage agreement. It is important to note that if the spouse living in the home is unable to make the mortgage payments on their own, they may need to refinance the mortgage in their name only or sell the property.
When it comes to joint mortgages in Dubai, it is essential to understand the legal implications of the divorce settlement. In some cases, the settlement may require both parties to continue making mortgage payments until the mortgage is fully paid off.
In other cases, the settlement may require one party to pay off the mortgage in full. It is essential to work with a mortgage advisor to understand the specifics of your situation and to determine the best course of action.
It's also critical to note that if the mortgage is in arrears or if the property is in negative equity, the situation can become more complicated. If the mortgage is in arrears, both parties will still be liable for the payments until the arrears are cleared.
In cases of negative equity, both parties will be responsible for any outstanding mortgage payments, even if the property is sold for less than the outstanding balance.
If you are going through a divorce in Dubai and have a joint mortgage to deal with, it is important to seek professional advice to understand your options.
Contacting a mortgage advisor or digital mortgage service such as Holo can provide you with valuable guidance on your mortgage products, help you navigate the process, and answer any home mortgage questions you may have. Our team of experts can offer you personalised solutions and help you find the best mortgage rates in Dubai.
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This blog is for educational purposes, but everyone's case is unique, and local guidelines and regulations may change. Our mortgage advisors can help you with any question you may have and have the latest advice. Get in touch.