Conventional and Islamic finance of home purchase : house mortgage urgent

Fatawa Question

Salam Dr. Kahf, I am in the process of buying my first house here in California. I would like to do it Islamically if I can. I have been talking with guidance, but their rates are way higher than other regular banks in the US. Their rate today is 6.75 % whereas other banks are around 6.0 %-6.1 %. Houses here in California are expensive and since I have to finance a large amount. My monthly payment and the profit there are going to make, is going to be a lot higher. In addition when I talked to them I felt that they are no different than other banks. Maybe the concept of Musharakah makes sense to me but the way they do their calculation is the same as any other banks. I don't know much about how Islamic financing works but I read your Fatwa about if the Islamic banks don't give competitive rates we can go to other banks. Question 1-Does guidance comply with Shari’ah law 100 %. So doing finance through guidance is worth it. Question 2-Could I take the Fatwa and use other banks for the reason I specified above. Please if possible you can email me back as soon as possible because I have to make the decision very soon. Thank you and Jazaka Allahu Khairan Moustafa

Fatwa

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Publication Date

2008-07-10

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

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

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-734844

• APA
• MLA
• AMA