Conventional and Islamic finance of home purchase : house financing in Sweden

Fatawa Question

Dear Dr. Monzer Kahf, Assalamu Alaykum wa Rahmatullah. I live in. Like any other Scandinavian Cities, housing is an extremely difficult thing in Stockholm. Since I have finished my studies a few years ago, I have been facing severe difficulties related to housing. As a student, I had the access to the student housing, but, I cannot live in those houses anymore as I have already graduated. In Stockholm, one has to get an apartment from Kommune (I.e. city council). Alternatively, one can get a place on so-called “second-hand rents”, means it is originally allocated to someone else, but for some reasons, it is rented temporarily to a new tenant. These kinds of renting are usually only available for shorter terms, 6 months, 1 year or so. I have tried to get a Kommune flat (I.e. city council flat) since long and after more than one year of waiting, my schedule now is 526 as of last week of February. I started with 600 + when I registered. This means, after 526 people get a flat, then I will get one from Kommune (I.e. city council). So, I virtually gave up on this option. In the beginning of 2008, I have stayed in a private apartment where I could stay from January 2008 until end of April 2008. After that, I stayed in a second-hand rent apartment in Stockholm until 31 March 2009 this year. Officially, I was staying illegally in that rented apartment. The owner showed me as his cousin and I am staying in this apartment as his guest, while paying more than the usual market rate. I also have to use his name as c / o for my address purposes. This is not a very good feeling to say the least. Moreover, when I came in that house in May 2008, I had to give him 3 months of advance rent payment, which I can only get back after I leave. I left this place in 31 March 2009 and after that, he would check the apartment and keep some money for renovation, which may have been caused by us. My experience since 2007 tells me that usually they use at least 2 months of deposit and renovate the house. As a second-hand renter, I basically have no say and accept his demands that he needs to use my deposit to do the renovation. This essentially means that I would have to pay at least a total of 14 months of rent for the year 2008. The same had happened to me in 2007, when I basically paid almost 15 months equivalent rent for staying in such an apartment. Now, I needed to get an apartment from 1 April 2009 and I did not feel very good to go through the same process. Moreover, generating money for the deposit is also very difficult, which I have lost mostly in my last two experiences. On top of it, after changing apartment every time, it takes a month or two to settle down in new place, which really takes away a lot of energy and time. With my wife and kid, this has very stressful for the last few years. I actually am not able to perfectly describe the hassle and difficulties that we are going through every year due to this situation. One solution that I could have done many years ago, was to get a bank loan for this, but refrained from doing so. Now, after my son has grown up and we have many things at home that it is virtually impossible to move at least once every year, in some cases even two times a year. So, I need your suggestions and advice regarding this. I have been in touch with Islamic Bank Bangladesh Limited, Islamic Bank of Britain, Bank Islam Malaysia, but none could give me a loan that I can use here in Sweden. Only option for me was to take a loan from here. I have been waiting for Islamic bank to be established in Sweden. But, it seems that it will take time, so I took a loan from a bank in Sweden and bought a house in April 2009. I intend to move to an Islamic house loan as soon as there is an option in Sweden. I have tried to read many resources on Islamic finances and tried my best to ensure that I am doing any Haram thing by taking this loan. So, I would like to hear from you if this was a correct decision from my side. Jazakallah Khair. Wassalam, Imad

Fatwa

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Publication Date

2009-08-17

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-734913

• APA
• MLA
• AMA