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A look at Joint Loans: Yes or No?

A look at Joint Loans: Yes or No? 1


A look at Joint Loans: Yes or No? 2

Marriage is often the start of a journey for a couple, and there are many aspects that will become significant for them both.

One of the most important issues, though, concerns property, as having your own roof over your head is pretty crucial for any couple, as a private space for both themselves as a couple as well as each of them as individuals in their own right.

This will lead to the discussion about buying a house – but even though the issue is a major one that will affect the health and happiness of the wedded couple, there are some aspects that are rarely discussed in public.

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Credit : Majalah Labur

One such issue is that of Joint Loans: should the married couple consider it?

The Hartabumi team talked to writer Kauthar Rozmal to get his thoughts on whether a couple should go all in together or fly solo when it comes to property loans.

The Loan Arranger

“Getting a joint loan usually happens when someone wants to strengthen their financial profile,” according to Kauthar. “It means that they want to borrow more than what they can individually afford.

For example, if the husband’s salary means that he is eligible to buy a house worth RM300,000, then the ‘joint income’ with his wife means that he is now eligible for a RM600,000 house.”

I Think I’m A Loan Now…

While the happy couple are still together in the land of the living, life pretty much goes on as per usual; it’s when one party passes away that possible issues can arise.

For Muslims in particular, the laws of inheritance will follow faraid, or the branch of Islamic law that deals with inheritance.

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Credit : Gfycat

“Let’s look back at the case we saw earlier: 50% of the house belongs to the wife, and 50% is owned by the husband,” Kauthar said.

“When the husband passes away, his 50% will be covered by his takaful insurance, and the wife’s 50% share still needs to be paid.”

He said that the husband’s 50% will be disbursed according to faraid. “This means that if his father is still alive, his father gets a share; then, his mother; then his wife and children.

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Credit : Gifer

So, how much of the husband’ 50% goes to his widow? It works out to only a quarter of that portion,” he said, adding that if the widow wants to buy the house in full – meaning she becomes the sole owner – she would need to buy off her late husband’s share from his inheritors.

Faraid, Feuds, and Fixes

According to Kauthar, matters concerning faraid in Malaysia tend to end up in disputes. Can the widow afford to pay for that 50% share? For example, if the house was worth RM500,000, the widow would have have to pay roughly RM250,000 in cash to get that share.

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Usually, she is unable to do so. “As such, a problem could potentially arise if the homeowner is not careful. Thankfully, there are several solutions that can be taken.

“As property owners, we should be aware of who our inheritors are: our children, our father, our in-laws.” said Kauthar. “Not to say that we don’t know who are our in-laws are – but we must know who our next-of- kin is, the people who are actually eligible to inherit from our spouses.”

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In general, faraid not only calculates specific proportions for each inheritor, it determines the order of inheritance as well. As such, each case would have to be determined on an individual basis, which is why getting proper legal representation and help is a necessity.

Another possible solution is with the concept of hibah (literally “gift”). “In hibah, the husband can literally “gift” the property to his wife, so that there is no issue or uncertainty about inheritance rights,” Kauthar said.


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