Faith IQ – Are Islamic Bank Mortgages & Home Loan Plans Permissible

			Are the Islamic mortgages or home purchase plans are offered by Islamic banks permissible?
		

			There's a real dearth I mean, a real problem in a lot of the non Muslim countries. The Muslim
countries are doing better on this now, but certainly US, Canada, they're struggling to be able to
put forward these kind of institutions that can allow house purchase plans for Muslims. The UK is
doing a lot better in that sense. legislation was done back in the court in brown days, when he was
I think the the Chancellor of the Exchequer then and
		

			removed certain kind of
		

			problems and barriers that would allow normal banks to actually see a bigger profit opportunity to
offer this product to Muslims. There's a huge discussion about it, some people say that you've just
made the Riba halal and this and that, actually, that's a very narrow minded approach. I consider,
as of right now, the product that some banks offer, or one particular bank offers, which is called
the the standard house purchase plan, which is based upon what's called a diminishing musharaka
debitum. League,
		

			a diminishing Partnership, which effectively has a bank and a person, you and you both go into a
purchase of a house, you choose the house, they say to you, you got 10 20% to put forward towards
the house, you say yes, you save up for it, it's a lot of money, of course, but you got to get that
money from friends and thing, whatever, 2030, grand, 40, grand, maybe 60 5060, grand, whatever it
is, you get that, and then the bank will go in the rest of the 90%, or the 80%. So you're now
partners in this house, that bank itself really, you know, I want you to understand that banks make
billions of money without ever having to take risk on the horrible things like cars properties and
		

			buying things. The government covers them, they make money just off the fact that they have money
and they make money. That's literally you know, they are, they are guaranteed by the government to
make money. So the last thing they want to do is to actually buy things. So when they do this is a
very positive sign for the permissibility of these kind of contracts. And then once you've bought
that they're not really interested in the house, but they know that you are and so you want to live
in that house and use it. And so you are going to be in 80% of their house. So they'll say okay,
well 20% is yours and you can live in that part. But the rest of it, we're going to charge you a
		

			rent, and a rent which is proportional to the amount that we own. And at the same time while you're
paying rent that we will decide according to x rate, and it doesn't matter what that rate is, but
they will choose it and you will accept it. And then also give you opportunities to make payments
back to pay back the actual sum to buy out your partner. And some of them are even generous enough
to offer you the purchase price to be fixed at the time of purchasing as opposed to saying the price
of what it would be in 30 years that the time you take to pay 30 years where the price of the house
or that will be doubled, and you'd be really, really stuck because it'll be very difficult for you
		

			to pay. So anyway, this is what's called a diminishing musharaka diminishing Partnership, which then
ends up with you owning it. I'm only going over very briefly, I believe this model, especially with
qualified Sharia scholars are not some lackeys and some charlatans, only that you might find in some
dodgy organizations, but recognize it a lemma. Okay. And the scholars know the scholars, you can ask
them and we know the supervisory board, I believe it to be permissible. I believe that a person can
use one of these to purchase a house and by the way, I just want to say to end that we should also
not be you know, polling decided that we must own you know, a house and renting is completely
		

			impossible. This is not go that way as well. But do I believe it to be permissible? Yes, I do. Hey,
thank you for watching and subscribe so you can continue to get the rest of the videos. I don't know
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allamani Rahmatullah