Islamic / Muslim Mortgages
Background
to Islamic / Muslim Mortgages
Ijara
Mortgages
Murabaha
Mortgages
Questions
and Answers about Muslim Mortgages
In
the last five years, the provision of Islamic banking facilities,
especially mortgages, has been a rapidly growing area. If you
want to borrow money to buy a property while remaining in compliance
with Islamic law, you will now find it much
easier and cheaper to do so than you would have done five years
ago.
This
might be good news for you, or you might be wondering what makes
Islamic mortgages different, and why they are needed. Read on
for all the answers.
Why Do We Need Islamic Mortgages?
Under
Islamic law (Sharia) the payment or receipt of interest (riba)
is forbidden. Interest is seen as a payment that is unrelated
to the value of the goods or assets being traded, and is considered
sinful.
In
other words, it is not permitted to make money just from lending
money – some additional service has to be provided by
the lender for them to earn their profit.
For
many Muslims in Britain this has led to an uncomfortable position
– they either have to live in long-term rented accommodation,
whilst trying to save the entire purchase price of a house,
or they have to compromise their beliefs and take out a UK-style
interest-bearing mortgage. In recent years, the options for
Sharia-compliant mortgages have improved considerably, meaning
that many Muslims no longer have to make these difficult compromises.
Remember,
it is perfectly acceptable for Muslims to make a profit by lending
money, but this must be done based on goods or services provided,
not simply by charging an arbitrary fee (interest) on the money
lent. There are two main ways of providing mortgages that meet
the requirements of Islamic law, and these are explained in
detail below.
Read
on
Background
to Islamic / Muslim Mortgages
Ijara
Mortgages
Murabaha
Mortgages
Questions
and Answers
