Best Mortgage

The Treasury and the Bank of England decided to encourage Islamic mortgages and investments in Britain. There’s a great number of well-to-do Muslims in Britain who prefer renting their instead of buying. The reason is that Islamic law prohibits Muslims to borrow or lend homes at a rate of interest. Now there are at least three banks that are ready to launch a special loan program which can solve the problem by avoiding charging rates.
Many successful British Muslims are willing to enjoy their lives and live in a nice home as they are able to afford it but they wouldn’t get mortgage because it doesn’t comply with their religious beliefs. There’s a constant dilemma. Under Islamic law (Sharia) you can’t lend or borrow at a rate interest. Either you break the law or you don’t get a mortgage. However, living in the Western society makes it extremely difficult to avoid.
Certainly, the number of wealthy British Muslims is growing and British banks are now trying to invent mortgages that would avoid charging interest and would comply with the Sharia. With Islamic mortgages, the bank might buy a 90% share of the home while the homebuyer buys 10%. The homebuyer borrows nothing, but pays a rent instead, only some of which will go straight to the bank. The rest goes towards gradually buying the bank out of its share of the property. These home loans do comply with the Sharia. That may seem like many other companies but there is one difference which is very important. Let’s suppose a person failed to pay and is going to sell the house. Basically, if you are a bank, a Muslim bank, lending to a Muslim, sharing with him, you are not going to sell the house in the way that it is sold now, by putting it in an auction and selling it at the easiest and the fastest price.
But still, today Islamic mortgages are only for the wealthy and hopefully in the near future affordable Islamic mortgages will become a reality.

This entry was posted on Friday, July 28th, 2006 at 12:18 pm and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.