Home mortgage in western countries : second mortgage

Fatawa Question

[Question One] : Assalamu Alaykoum. In cha Allah I am planning to buy a taxi license in Laval Quebec Canada, I explained to the bank the Islamic rules, they accept to make a contract not mentioning interest rates ,they will calculate it according to their way which is a 5.15 % interest rate, but in the contract they will write as an exaple that the 200,000 $(my house as a guarantee)which is a second mortgage loan will be payed 250 000 $ in 7 years .or 5.15 represent administration fees, I tried Islamic financial institution in Canada as MIJ but they no money available. I appreciate very much to have an answer this week before January the 5th 07 Wa Zajakum Allahu Khayran Wa Assalmu Alaykum Wa Rahmatu Allah [Question Two] : Bismi Allah Al Rahman Al Rahim Al Salamu Alaykoum Wa Rahmatu Allah I Taala Wa Barakatuh. May Allah accept your efforts and time devoted to spread the Islamic values and teaching especially this time. What I understood from your email that the contract with the bank is Haram. There is some taxi owners sale with 14 % interest for 9 years you pay exp 850 $ per week. The Islamic financial institutions as MIJ their charges are based on the value of the rent which is 650 $ per week in Laval Quebec. Dear brother al Hamdu Lillah I finished the payment of the house and as I mentioned the bank wants to give 200000 $ for the house (will be sold to the bank) and the bank will engaged to sale me the same house in 5 to 7 years and the price will be exp 250 000 $. In the contract the interest won’t be mentioned, but the bank will be calculating their profit or interest on 5.15 %. Please advice me. Again may Allah accept your efforts. Wa Jazakum Allah Khayran Wa Assalmu Alaykum Wa Rahmatu Allahi Taala Wa Barakatuh

Fatwa

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Publication Date

2007-01-02

Main Subjects

Economics & Business Administration
Islamic Studies

No. of Pages

3

Data Type

Fatawa

Language

English

Record ID

BIM-785669

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