Mortgages Tailored to Islamic Home Buyers

A few years ago, an Islamic home buyer would have found it almost impossible to get a mortgage compliant with Islam’s sharia law, which prevents the faithful from paying interest.

Today, sharia-compliant loans are a growing market. In a report last month, credit-rating agency Moody’s Investors Service said the global Islamic finance market has increased about 15 percent in each of the past three years and is now worth about $700 billion worldwide.

All the largest lenders, including Citigroup, HSBC, and Deutsche Bank, have affiliates devoted to Islamic finance.

An Islamic mortgage looks like a lease-to-own deal. The bank, not the borrower, buys the house. The borrower makes installment payments to the bank for a period of years, at the end of which he or she gets the title to the house.

Source: USA Today, Paul Wiseman (03/27/08)

I’m really fascinated by this. Sounds like an advantage over other borrowers. Are their loans or purchase prices larger to cover what would have been interest? Can anyone direct me to a mortgage consultant with this specialty?

Author: niaknowles

From Native New Yorker (Brooklyn) to Atlanta Realtor, with a love for architecture and design. Atlanta based Real Estate Consultant working to restore and sell Intown Homes; REO,South West (Westside,West End, Westview Communities 30310,30311,30314,30318 zip codes)

2 thoughts on “Mortgages Tailored to Islamic Home Buyers”

  1. This is not what you think it is. It is an incidious way to inflitrate the west. This practice of Sharia Finance was developed by the Muslim Brotherhood .in Egypt in the 1920’s

    check out this blog which will teach you about the underlying implications of this type of finance

    http://shariahfinancewatch.wordpress.com

  2. “Are their loans or purchase prices larger to cover what would have been interest? Can anyone direct me to a mortgage consultant with this specialty?”

    There are few different methods where shariah law can be satisifed. Firstly, it is important to understand why such models exist – and i dont think it has anything to do with the Muslim Brotherhood of Egypt (whoever they are) – it is unfair to give ‘credit’ of others to someone else. There are 3 countries that are ‘pioneering’ this kind of finance: Malaysia, Bahrain and the UK.
    Islam is supposed to be a way of life – and if all muslims actually practiced Islam before its mixed with customs of their own country, the world might just be a better place.
    As far as economics are concerned, Islam forbids Usiry/Interest, Gambling, it even prohibits ‘hoarding’ of wealth and finally, it forbids enetering into transactions that have Uncertainty/Ambiguity involved.
    There are many decent books on this topic if you are really interested in knowing what the big deal is with Islamic Finance.

    Going back to Property finance, there is no such this as Islamic Mortgage or shariah-compliant loan… any loan will be attached to interest no matter what it is termed as and hence prohibited. Islam does encourage investing (‘hoarding’ being prohibited)…
    [continued]
    http://1efinance.spaces.live.com/blog/cns!395385358190596A!523.entry

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