"Islamic mortgages" in the UK

[Optimist]

Now this is giving me serious headache.

I'm not in anyway good with finances. I want to settle and have a house and -as you can expect- not got the right amount of money. I dont want to deal with usury either. Its a real dilemma. Thought that a midway solution might be Islamic mortgages. Looked on the internet, apparently very controversial. Tried to email a couple of scholars and really begged for answer - no answer what so ever. Tried to ask the local imam and he refused to answer. Now I have registered for an Islamic finances course but it is not due until Jan.08.

Few months back I made up my mind and went for alburaq product. The whole thing is just taking up for ever. During this time I've got increasingly confused. These "Islamic" products seem to be more expensive for no tangible difference (not that I know anything in finances you know). Apparently respectable scholars have approved it and I'm willing to pay the extra bit provided it is truely different.

What's do you guys think about it ? any one had any experience/discussion with any scholars? Compared with conventional mortgage/remaining without a house, what do you think the least evil is ?

I'd really appreciate any advice.

 

[Optimist]

no replies at all !!

Come on guys .. some help please

 

[Mabsoot]

The "Islamic Mortgages" are big rip-offs. You will end up paying much more than any other mortgage. - Really, they just give it a different name and do it in a different way. Allahu A'lam. Personally, I wouldnt get an "islamic mortgage" it reminds me of how the Jewish people used to caste their nets on the night before Sabath and then collect the fish afterwards as a way of getting around the Sabath restrictions.

It is very tough for Muslims in UK and around the world to purchase property. Especially in UK as the prices have gone so high.

I know that some scholars have said you can buy one property in necessity if there no other alternative.

- Council housing, Rent might not be applicable because of the area a person is in. It may be that the council estates are full of crime or the rentable homes are in bad area..

I will try to phone some Scholars see what they say, inshaAllah.

 

[Optimist]

Jazaka Allah khairan bro Mabsoot

I'm not eligible for council housing as I'm not a UK national.

I can rent (mortgages are actually more expensive) but it does not seem like a viable option in the long run.

Most opinions on the net are about Ijarah/Murabaha. The currently implemented schemes by both HSBC & alburaq depends on diminishing musharaka ... I have not found any detailed analysis about this particular transaction.

many thanks for your help

 

[dianek]

My husband and I are buying a house and we are using owner financing, but interest is still there.....BUT we also looked at islamic funding and they just change the wording around and cost MORE, like you said. This is my unislamic perspective....isn't it better to pay mortgage (and unfortunately the interest too) and put that equity of owning a home in your own pocket rather than making the land lord richer? There are also some different types of loans here in the US......like interest only loans, 5/10/15/30 year mortages......If you go for a shorter mortgage term your interest will be less overall and maybe you could ask to pay the "interest" up front as a one time payment and only be left with the principal to pay. AND when that is paid off in 5 or 10 years....when you sell your house down the road......you own it and owe no one and so all that profit in equity can provide you with enough money to pay cash for another home of your choice. Just my thought. I think buying is better for you and your family in the scheme of things.

 

[q8penpals]

Salam

Even in Kuwait (a Muslim majority country) there is difficulty with deciding how to do loans for cars and homes.

Most of the banks offer traditional loans (as in, you pay a "monthly fee" - which is a percentage of what you owe - if you do not pay off the whole loan, which in, like we all know, the same as interest).

Some of the banks have "Islamic Loans" but they generally cost more in the long run, because you pay a percentage of the TOTAL amount up front.

Also, the "Islamic Loans" totally rip you off if you have the means to pay off the loan early, because you pay the entire fee no matter if you pay the loan off in 1 month or the last month of the loan. As a matter of fact, my husband had to pay an additional fee to pay off his loan early, so they charged him even more.

I don't know what the answer is. Most of the Islamic question/answer type websites just give the standard "DON"T BUY A HOUSE IF YOU DON"T HAVE CASH" - well, then, there will be very few Muslims owning homes and property because there are so many places where it is so darn expensive to buy a home.

So, what to do? Who knows....

Lana

 

[Optimist]

Thanks Diane. I'm acutely aware of this argument. Even if leave the UK and go somewhere else I will still be without a house ... therefore renting does not seem viable in the long run. I need a house that I own so I can shift the value around.

Its tough. I cant take away this feeling of guilt and that all my dilemma is down to greed. I'm not homeless after all and many people in this world would wish to be in my situation - the situation that I'm not satisfied with.

It's all fine saying that Islamic products are about changing the name but I cant help thinking that it is because they are more expensive people are applying too much scrutiny. If they were cheaper they would have been readily accepted regardless how much they do comply with shria'a ... they are approved by some scholars after all.

 

[dianek]

Thanks Diane. I'm acutely aware of this argument. Even if leave the UK and go somewhere else I will still be without a house ... therefore renting does not seem viable in the long run. I need a house that I own so I can shift the value around.

Its tough. I cant take away this feeling of guilt and that all my dilemma is down to greed. I'm not homeless after all and many people in this world would wish to be in my situation - the situation that I'm not satisfied with.

It's all fine saying that Islamic products are about changing the name but I cant help thinking that it is because they are more expensive people are applying too much scrutiny. If they were cheaper they would have been readily accepted regardless how much they do comply with shria'a ... they are approved by some scholars after all.

A home is not greed, it is about securing your roots firmly for your family....when renting, at any time a landlord could ask you to leave for whatever his reasons are. If you OWN, no one can force you out. Again, my unislamic perspective is....if you are allowed in islam to do it ONCE for the better of your family, you won't have to do it again!

We were also blessed to be able to build a home in the Cap Bon region of tunis with all cash in my husband's country. But you can't do that living in the US or i am sure the UK. We paid under 40 thousand dollars total for the house in Tunis and our modest house here in the States, a whopping 164,000 dollars, with no real amount of land and certainly no view of that majestic mediterranean sea......

Guess you could always rent now and buy in another country....but then.....I don't know what work there is in Tunisia or your native country.

 

[Mabsoot]

:salam2:

I have an Idea, why dont we, as a group of Muslims who inshaAllah are reliable and trustworthy, work together to purchase home in some way.

It be so cool if we bought some land and built our own houses, have like our own little Muslim street !! with our own Masjid and nice community.



... someone wake me up

-- but, I guess a more realistic option is to do a business together. . . rather than buy houses like that. Allahu a'lam. anyway, I will find out about what was said earlier inshaAllah from Scholars.

 

[Peace2u]

:salam2:

I have an Idea, why dont we, as a group of Muslims who inshaAllah are reliable and trustworthy, work together to purchase home in some way.

It be so cool if we bought some land and built our own houses, have like our own little Muslim street !! with our own Masjid and nice community.



... someone wake me up

-- but, I guess a more realistic option is to do a business together. . . rather than buy houses like that. Allahu a'lam. anyway, I will find out about what was said earlier inshaAllah from Scholars.

Salam Brother Mabsoot,

Care to share with us what business plans you have in mind?

 

[Ahmed ibn Ibrahim]

:salam2:

Maybe I'm just naive but I thought that there were legitamite business-groups, somewhere out in the Middle-East or even here in Canada, with brothers who own great commerce and influence that are actually offering reasonable home-financing solutions - maybe through purchasing the property upfront and using that capital for leverage in their respective martketplaces, while. I'm no economist, I know. InshaAllah some of these businesses out there in submission to Allah SWT, because not owning your home these-days can be suffocating, financially especially.

We're renting until we figure something out, though it looks like we'll try to save up the money and buy our home outright in the future, inshaAllah.

 

[arabiantxn]

^^^^
inshallah amen 'brother.

I too am looking to buy a house a house for rental purpose. Please pray for me that I have a house of my own for my family.
MY parents are investors who buy and sell properties.

 

[Optimist]

any news bro Mabsoot ?