Buying properties on interest loans : home financing

Fatawa Question

[Question one] : Salam u Alakum Br. Monzer, I have heard that obtaining financing from a bank for a bank owned home (foreclosure) is not Haram. The reason for this is because it only involves two parties (buyer and seller) as opposed to traditional financing which involves three parties (buyer, seller and financier). Please advise your thoughts on this matter [Question two] : Thank you very much for your response. Your help is greatly appreciated. I want to see if I understand this correctly, If the contract states selling price $ 250,000. It is not Haram ? (even thou the market value of the house is $ 150K) However, if it states selling price $ 150,000 and 5.5 interest (totaling $ 100K over 30 yrs). It is Haram ? What are your thoughts on various Muslim banks ? Any recommendations ? Any that are not legit ? [Question three] : I have another question ; it appears all contracts with Islamic bank must mention loan and interest due to the federal reserve and IRS requirements for disclosures for home financing companies. Does this mean that these contracts are not Shari’ah compliant ? Jazakum Allah Keir, Samhouri

Fatwa

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Publication Date

2009-08-07

Main Subjects

Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Housing
• Financing

No. of Pages

3

Data Type

Fatawa

Language

English

Record ID

BIM-729720

• APA
• MLA
• AMA