Financing house purchase in the west : buying on mortgage in Canada

Fatawa Question

I hope you remember me. We met during ISNA conference. I was also the coordinator of one of the programs during the conference. Well, after all I am your sister in Islam and I have a question which is a great concern of many Muslims in our community. Q. Are we allowed to take mortgage for buying our first house here in Canada. I am trying through Islamic housing society, Canada to get loan free of interest. They provide loan up to C $ 140,000 only the rest we have to come up our selves. We have to keep that rest of the amount for six months in their account. Even after six months if our turn to get loan doesn't come, then we have to wait until the turn comes and our money will remain with them. Till we pay off the loan money our property will be in their possession and they will charge us rent to May monthly to them. The rent is their income. When we buy shares from them they pay us provident which we pay them back to reduce the capital loan. At the time when we pay off all the loan and take occupancy of the house we have to buy one G class share which is 10 % of the difference in value of the property from present value minus the time when loan was taken.( the difference could be 200-300, 000) In this way they are charging more than the banks, they are taking rent which the bank calls interest where as the interest of the bank is much low. Bank gives us any amount we need to purchase the house. To buy from theses people we have to collect the remaining balance for example C $ 400, 000 is the price of the property. They pay 140,000. Therefore we have to collect C $ 260,000 our self and till we collect this amount and wait for six months we have to live in a rented house. We have been living in Canada since more than 5 years in a rented house and paying C $ 1130 + electricity per month as we are a big family of six family members. You can imagine how much we have paid to our land lord in five years and six months.

Fatwa

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Publication Date

2003-01-20

Main Subjects

Financial and Accounting Sciences
Religion
Islamic Studies

Topics

• Islamic jurisprudence
• Dwellings
• Financing
• Purchasing
• Canada
• Subprime mortgage

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-725467

• APA
• MLA
• AMA