Financing house purchase in the west : buying a house on mortgage in the USA : [1]

Fatawa Question

Assalamu Alaikum, My question is about buying house by mortgage. I want to explain how these financial transactions happen in the US. The bank buys the house from the seller, then I make fixed payments every month to the bank based on contract between me and the bank after they buy the house from the seller. So I know how much I am paying for the house by the end of the mortgage period. And I gain ownership gradually with every payment I make. If the loan is made this way, wouldn't be Taqseet (installments) or Bay' Ajal (deferred payments) ? It is true that the payment is based on an interest rate that is why it is considered Riba by many scholars. If you rule this unlawful, what should I do, do I have to sell the house ? I know there were Fatwas about Muslims living in non Muslim countries and they're in need for housing, I asked about these when I bought the house, but now I feel that I need to get more decisive opinion about that. I just want to note also that in my area rent is high, that it cost less to buy than rent ? Would this constitute a need ? Jazakum Allah Khairan and please help me to find the best way to please Allah and stay away from Haram in this matter.

Fatwa

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Publication Date

2002-08-21

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Subprime mortgage
• Transactions

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-725453

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• MLA
• AMA