Conventional and Islamic finance of home purchase : taking interest-based loan to buy a house

Fatawa Question

Dear Dr. Monzer, Assalamu Alaykum Wa Rahmatu Allahi Wa Barakatuh, In the name of Allah, most gracious, most merciful. All praise and thanks are due to Allah, and peace and blessings be upon his messenger. Dear brother in Islam Al Salam Alaykum I am a Swiss Muslim live in Switzerland. I live in a rented house for around 10 years ; this house has 2 floors, 2 families live in this house each floor one family. The owner of the house wants to sell the house to one of these 2 families (my family or other family). The owner propose us first as we are living in this house much longer than the other family. We want to buy house because our children grew up and go to school in this area and my old father lives in the same street and the house cost 1550000 Swiss Franc. The money we saved is only 700000 francs, to be able to buy this house it is necessary to take interest-based loans from banks, we rent this house since 10 years already and we are paying rental fee which the same amount I am going to pay to the bank as interest , if the other family will buy the house, they will ask us to leave because they always wanted to live in the part we rent as it bigger and nicer, and we cannot easy find new house of apartment in the area where we live now. We only want to keep this house and no attention of doing business or earning money in this bank deal. Any prohibition may have certain necessity circumstances that call for relaxation. This applies to Riba and too many other prohibitions. Of course, a necessity must always be given its right weight since it is Allah, the most knowledgeable, who is going to screen our truthfulness, not anyone else, can you justify this case as necessity and advise us to go ahead and buy the house or say Hasbi Allah Wa Nima alWakeel. May Allah guide you to the straight path, and guide you to that which pleases him Jazakum Allahu Khairan for your constant help Yours, Sami

Fatwa

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Publication Date

2008-06-24

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Housing
• Financing
• Loans
• Purchasing
• Real property
• Commercial finance companies
• Usury
• Subprime mortgage

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-734838

• APA
• MLA
• AMA