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Posted By Topic: Is laribaa and other so-called Islamic Mortgages Halal

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02-03-2005 @ 8:35 PM    Notify Admin about this post
Abu Mu'aawiyah unspecified (unspecified)
Posts: 26
Joined: Feb 2003
As Salaam Alaikum

The question of Islamic Financing of Homes has come up again.  We would like to know if it is permissible to buy a house through and other so-called Islamic Financing companies in the West?

The system is set up where the mortgagor selects a home, he/she puts down a large downpayment, and then a monthly payment is determined.  Part of the monthly payment goes to the lease of the house to the purchaser/occupant.  Since this part of the payment is rent, it will not be used to pay down the house.  Furthermore, the other part of the monthly payment will be put in a trust account and will be used as the principal to pay off the value of the house.  This second part of the payment is your equity.  Assuming that the money is not placed in a interest bearing account is this transaction halal?

Has the scholar ruled on this issue and if so, what is their ruling.

Abu Mu'aawiya Malik ibn Marguerite (Swift)

02-04-2005 @ 10:00 PM    Notify Admin about this post
Hamza ibn Shaukat ibn Muhammad (London, UK)
Posts: 96
Joined: Nov 2003
Wa 'alaykum asalaaam

This sounds a lot like the HSBC scheme established here in the UK.

Shaykh Ahmad ibn Yahya an-Najmi answered the inherent problems contained in the above scheme. Here's the link. Pray it helps:

Wa salaam

Subhaanakallaah humma wa bi Hamdika Ashadu allaa ilaha illa ant, astaghfiruka wa atooba ilayk

02-08-2005 @ 3:22 AM    Notify Admin about this post
Daud ibn Tunnell (West Chester, PA)
Posts: 126
Joined: Apr 2003
Salaamu Alaykum,

What the Shaykh (Hafidhullaah) said is certainly sufficient for us!  Even from a financial analyst perspective: if you look into the details of those financing agreements, there is ribaa hidden throughout them.  Certainly, no kuffar, western bank like HSBC, nor a "Muslim" bank that imitates the kuffar will buy anyone a house, and let you make payments on it for 30 years (standard duration of a U.S. mortgage), and not charge ribaa for "tying their money up" for that length of time.  We learned in finance 101 in b-school: "There is no such thing as a free loan".  It is my observation that these so-called "Islaamic Mortgages" are nothing but marketing schemes to get the Muslims wealth in western countries, which is dramatically increasing.

Baraka'Allaahu Feek,


..."Know that the Religion is what came from Allaah, the Blessed and Most High.  It is not something left to the intellects and opinions of men.  Knowledge of it is what comes from Allaah and His Messenger (Salallaahu Alayhi wa Salam)"...Imam Barbahaaree

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