Transactions confused with interest : refinancing to get some money out

Fatawa Question

Assalamu Alaikum. I purchased a home for my sister 3 years ago because she was experiencing financial difficulties. I have an outstanding mortgage balance in the amount of $120,000, after having put approximately $ 150,000 into the house. The problem is that I can't afford to keep up with the payments and also I would like to receive some equity out of the house as I need immediate cash. What are my options ! My thoughts on the issue are this. 1. My sister purchases the house for whatever amount she can afford to pay. The downside to this is that would mean I could never get out of the house what I put into it and my sister would end up with a 30 year mortgage. Not good. 2. I keep the house in my name. My sister pays as much as she can monthly. I make up the balance. Then I refinance the house to get out some equity. Is this acceptable in Islam ? Your Sister in Islam, Aisha Notes : property value approximately $ 270,000. I am a new Muslim. In Sha Allah my husband is just in the process of accepting and doesn't understand usury. He is a business man and doesn't want to lose what he feels is his. I could give more info if required.

Fatwa

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Publication Date

2001-09-05

Main Subjects

Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Refinancing
• Real property
• Usury
• Subprime mortgage

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-726593

• APA
• MLA
• AMA