Did you buy a house the halal way?

[Ramadhan]

I just bought a house and is on halal mortgage (we call it here in indonesia KPR syariah).
The bank basically bought the house, and I am renting it from the bank, which is considered as installments. So it is somekind of leasing actually.
And the monthly installments is actually higher than the commercial mortgage, and the total amount I will pay to the bank is more than twice the amount of money bank paid to the developer.
I didn't want to take out commercial mortgage because it is haram even tough it would be cheaper for me, and at least with the "halal mortgage" it supposedly follow Islamic syariah and give me some sort of reassurances.
ironically, because of government regulations, I am obliged to take out life insurance as part of the deal with the bank because the bank wants to cover all bases in case I go bankrupt or dead, and I know that life insurance is not regarded as halal by many scholars.
For most people here, especially with how ridiculously expensive houses are (compared to average incomes), it is just not possible to own a house without taking out any kind of mortgage.

In this era, it is almost impossible to avoid riba completely, which reminds me of a hadith:
Abu Hurairah (R.A.) says that Rasulullah (Sallallahu Alayhi Wasallam) said, "Undoubtedly, a period will come upon the people wherein not a single person will be saved from indulging in interest. If anyone avoids direct indulgence in interest yet he will not escape the smoke (effects) thereof. Its effects will somehow reach him.

May Allah SWT forgive me and all muslims who try to avoid riba but yet still cannot escape from its effects. Amiin

 

[jimbo123]

I get so depressed whenever I think about this. Especially when some of my family is pressuring me to buy a property. The thing is, salary wise I'm actually doing well off compared to most people I know. I feel sorry for poor people. I'm trying to think of other things I can invest in like shares or businesses to speed up the process of buying a house (outright).

Hypothetically, if the whole world decided to rent instead of buying on interest, would it cause banks to topple over?

 

[nature]

i would assume it isnt a waste of money. how is it a waste when you're paying for a roof over your head?

your right, its a roof over your head but for how long ?? your landlord can charge you extorniate fees weneva they like right ? even with a tenancy agreement, there is always the chance that you could get asked to vacate the property at any given time.? thats not something i would want to worry about, esp if i had children later on down the line. with renting there is no security. Btw ive seen a lot of tennants chucked out, & i have relatives in the landlord trade, so i kinda know how it works. there is no such thing as a nyc landlord these days.

:wa:

 

[nature]

I just bought a house and is on halal mortgage

from what ive seen the halal mortgages in the UK arent really halal as already mentioned by someone else.

The bank basically bought the house, and I am renting it from the bank, which is considered as installments. So it is somekind of leasing actually.

so once you've paid off the bank the house is yours ? I dont think they have anything like that in the UK ?

May Allah SWT forgive me and all muslims who try to avoid riba but yet still cannot escape from its effects. Amiin

I honestly cant think of a way around it these days. surely getting a mortgage, is a way of securing a roof over your familys head, right ?

I get so depressed whenever I think about this. Especially when some of my family is pressuring me to buy a property.

Snap!!! since every1 i know has one, they dont see anything wrong with a mortgage, and its unavoidable IMO. + as the housing market is currently very low, i did think of getting one out on a place in the next few weeks. I just dont like the negatives that come with renting, and its not that plain sailing as some think.

as already mentioned, why dont you add a poll ? if members arent scared to admit it, then im sure the results wud be interesting as to how many people actually have one.

:wa:

 

[Ummu Sufyaan]

your right, its a roof over your head but for how long ?? your landlord can charge you extorniate fees weneva they like right ? even with a tenancy agreement, there is always the chance that you could get asked to vacate the property at any given time.? thats not something i would want to worry about, esp if i had children later on down the line. with renting there is no security. Btw ive seen a lot of tennants chucked out, & i have relatives in the landlord trade, so i kinda know how it works. there is no such thing as a nyc landlord these days.

:wa:

wa alaykum us-salaam
i guess it depends on where you are then. some people dont have problems with the landlord but with the house itself...like its not really that much value for what they are paying.

 

[Detritavore]

Home ownership doesn't fair high on my lists of things I care about right now. Haha, that's the nomad in me speaking though.

 

[jimbo123]

Maybe it would be better to rent for 20 years. Really save up and make halal investments. Then after 15-20 years buy a house.

The only downside to this is that in those 20 years you'll need to live a really simple life. I haven't really seen much of the world and always wanted to go travelling after marriage!

 

[Hamza Asadullah]

but the interest is tax deductible so you get it back at the end of the year.

i have a mortgage on my home but 1 its tax deductible so i get all the interest back and 2 we dont make the minimum payments we pay as much as we can afford so we should have it paid off in no time.

Asalaamu Alaikum, sister let us not sugar coat the fact that the mortgage you have is still interest based and is therefore still haraam. Whether you gain a little or most of what you pay in interest the fact remains that you are still paying interest and those who pay interest are at war with Allah and this is a war one will certainly lose.

 

[Hamza Asadullah]

your right, its a roof over your head but for how long ?? your landlord can charge you extorniate fees weneva they like right ? even with a tenancy agreement, there is always the chance that you could get asked to vacate the property at any given time.? thats not something i would want to worry about, esp if i had children later on down the line. with renting there is no security. Btw ive seen a lot of tennants chucked out, & i have relatives in the landlord trade, so i kinda know how it works. there is no such thing as a nyc landlord these days.

:wa:

Asalaamu Alaikum, one who rents to stay away from starting a war with Allah is FAR better than one who gives in and makes excuses trying to justify taking out an interest based mortgage and going at war with Allah. I know many people who have rented for many years and they are very happy indeed. Tenants have a lot of rights in the UK so renting here is very easy indeed and i would rather rent than to start a war with Allah. May Allah save us from that.

 

[noorseeker]

A short clip showing you the winners and losers of Paying interest.

People need to know the affects it has later on,

rather than thinking its a bit more extra money you have to pay.

 

[Hamza Asadullah]

Maybe it would be better to rent for 20 years. Really save up and make halal investments. Then after 15-20 years buy a house.

The only downside to this is that in those 20 years you'll need to live a really simple life. I haven't really seen much of the world and always wanted to go travelling after marriage!

Asalaamu Alaikum, my brother do not be put off renting by those who try and justify taking out haraam interest based mortgages by sugar coating it talking about tax deductions and those who say there is no other way. The fact is mortgages are forbidden and will always remain so.

Many people i know rent just to stay away from interest and can you imagine how happy Allah would be with a person who would go out of their way not to go near interest just out of the fear of Allah. So let us be of these people who do everything to please Allah and keep away from anything that displeases him.

Who puts money in your pocket? Who feeds you and your family? Who has given you everything you have and everything you will ever have? Then do you not think that Allah will not give you more if you avoid that which he hates? Therefore my brother have full hope, reliance and trust in Allah and live everyday to do everything which pleases him and stay away from anything that displeases him. Surely Allah gives more to those who are fearful of him and try their best to please him for it is Allah that will give you what you need not the bank or the organisation you work for. Thank Allah as much as possible and he will give you more for he always lives up to his word.

And Allah knows best in all matters

 

[nature]

Asalaamu Alaikum, one who rents to stay away from starting a war with Allah is FAR better than one who gives in and makes excuses trying to justify taking out an interest based mortgage and going at war with Allah. I know many people who have rented for many years and they are very happy indeed. Tenants have a lot of rights in the UK so renting here is very easy indeed and i would rather rent than to start a war with Allah. May Allah save us from that.

:wa:

I wasnt making excuses, & i was only giving my input to the OP + i didnt know that mortgages was haram, or how serious it was & the last thing i would want is to be at war with allah, i dont think anyone wants that. However ive done my homework now, & know better & have found an alternative.

Maybe it would be better to rent for 20 years. Really save up and make halal investments. Then after 15-20 years buy a house. The only downside to this is that in those 20 years you'll need to live a really simple life. I haven't really seen much of the world and always wanted to go travelling after marriage!

Ive been looking into this. Im presuming your from the UK ? what about the council house scheme in England ? this is really good as you bid for a property that is to your liking and when you do get the property you pay rent.also in the long run this is a lot better because if you wish to buy this property from the council they will sale the house to you with a percentage of discount counting on how much rent you have paid in the past. you can get a place via the local authority/housing association bidding system; in most parts of the UK your income etc doesn't matter anymore; its more that you're willing to be flexible where you want to live and also just have a lot of sabr as it can take a few years to get a property once on the waiting list. many boroughs now allow people on their waiting list who have absolutely no priority or needs because they don't want properties lying empty.If you're interested you usually go to your local council offices and ask to apply to go onto their housing register. In some areas all the other social landlords (charities., housing assocs etc) have their own seperate register which it is a good idea to get onto as well. Nowadays most councils have a 'bidding' system you either bid online or on computers in your local council offices; this way you can choose which property you are interested in. You may have to provide a lot of paperwork but it is worthwhile.

It will be up to the social landlords if they want to charge the maximum amount allowed; which will be 80% of typical local rents for that type of property, and the reason they will be allowed to do this will be to raise revenue to build new housing. In some areas social rents are for some reason more than private ones anyway; so it will actually end up being cheaper. Also they are saying that you will be put on a starter tenancy for two years; which is subject to review after that time period in terms of your income etc; at the moment most local authorities/social landlords put you on a 1 year starter tenancy anyway so it will be more secure. It is still a lot more secure than most private tenancies whatever they do.

If you take this route, then really your paying towards buying your house. I intend to do this, & it suits me better, + you can always fit in your travelling...

Theres also a company called Guidance Residential (overseas) is that you are co-owners of the home. They buy it and you pay them back for it. They set a rate that you pay buy it from them at. you can read their policies on net. I understood that they have investors who buy the homes and you are both co-owners.

Hope this helps.

:wa:

 

[abdul80]

Asalaamu Alaikum, sister let us not sugar coat the fact that the mortgage you have is still interest based and is therefore still haraam. Whether you gain a little or most of what you pay in interest the fact remains that you are still paying interest and those who pay interest are at war with Allah and this is a war one will certainly lose.

Asalaamu Alaikum,
Allah says: "the God desires for you ease; He desires not hardship for you".
Muslims are not supposed to be homeless, hostage for land owners by being permanent tenants, narrow minded, and living under critical conditions of worry and weary. They should not remain in dilemma, perplex, trauma, financial restrictions, school drop-out kids, and so on and so forth.
Muslims are not supposed to be the lowest class of nations. God says: "You are the best Community that has been raised up for people4". Thus, Muslims are required to be financially, intellectually and technically strong as they are required to be fit in every situation with the best manner. They are not expected to lead any kind of problem, malicious or disastrous activities neither against themselves nor against others. The Prophet Peace Be Upon Him said: "the Islam-Muslims increase and never decrease". He also said "Islam should be above and none to be above it".
Purchasing a house in a Mortgage system has been a circle of dilemma and dispute among Muslims, in the Western world, since their settlement and establishment in the West. Some Muslim Scholars are obsessive to its prohibition while others insist its permissibility. In fact, none of the two should be condemned for being wrong, due to the complexity of the discipline. Both sides base their judgements on knowledge meaning of understanding the general concept of the Islamic teachings. The contentious point is whether mortgage system comes under the category of Usury–riba norms or not, and if it comes under, is it necessity or not?
Linguistic meaning of Riba- Usury is the process of lending money or other property and charging interest the borrower over any late payment, especially at an exorbitant or illogically high rate. In other words, demanding for the use of money as a loan, a rate of interest beyond what is allowed by law.
Technical meaning (istilahan); it can be summarised as an interest charged on loan that is given to a person for purchasing basic necessities.
No doubt, Usury is one of the most serious offensive sins forbidden in the Qura’n, Gospel and Torah-Islam, Christianity and Judaism respectively. It is not only a Sin but to opt and prepare for waging war against the God. God, the Almighty says: "O, you who believe! Fear God, and give up what remains from usury, if you are believers. And if you do not, then be warned of war (against you) from God and His Messenger
Before down tracking to the theme, let’s highlight why Usury is prohibited in Islam? In short, Usury is the main source of capitalism and eco-slavery system. It creates economical categories among the society by giving an opportunity of economic booming and grafting money to those who are already in prosperity, while it forces disastrous
poverty and inflation to those who are already under poverty. Given to economical wise, it leads to slavery based on economical differences. Despite its prohibition, one must deeply understand the meaning of Usury, before making final decision and religious judgement on it.
Coming to the point, Mortgage seems to be permissible to Muslims as its current manner relying on the meaning of Usury itself. According to the definition given by Imam Hanafi (the First Islamic Scholar who was born in the year of 80 AH) one part of the business transaction that may take place under critical circumstance of needs, where Muslims are minority (probably as today’s Mortgage) is permissible due to its necessity. Modern Islamic Scholars analyzed the Hanafi’s point of view alongside with the meaning of usury and the main concept of the Islamic jurisdiction. On the base of such analyzes, they justified that Muslims could buy mortgage houses for living purpose
Islam is usually based on mercy and promotion of the society’s good intentional interest. The God wants Muslims to dwell in the best manner and tranquility as easiest as possible and permissible. Allah says: "the God desires for you ease; He desires not hardship for you.
Muslims are not supposed to be homeless, hostage for land owners by being permanent tenants, narrow minded, and living under critical conditions of worry and weary. They should not remain in dilemma, perplex, trauma, financial restrictions, school drop-out kids, and so on and so forth.
The acceptable general concept is that Muslims should not be allowed to live in a low class among their contemporary nations. Instead, they are inquired to lead others both economically and in dignitary wise so that others might join them and follow their footsteps. This means Muslims are always expected to be the best role models in terms of economy, education and civilization, and not to be backward society.
It is true that most of the mortgage systems come under the category of Usury in one-way or another. However, there are certain formulas and principles that provide acceptance in the Islamic jurisprudence.
At its current situation, both student loans and mortgage housing would be permissible in Islamic jurisprudence for the following evidences:
In Islamic Jurisprudence, there is unanimously agreed principle known as: "necessity makes the prohibition permissible" (adaruratu tubihu al-mahthurat). Considering the ghettoes situation around those neighbourhoods live in subsidized houses, it is important to seek an alternative lifestyle. If we compare between the teenagers live in subsidized houses and those live in private residential areas, we can find out the difference. Then, if we search and analayse the integral part of the problem, we can identify the role of the subsidized housings. Therefore, there is no harm upon a Muslim person for purchasing living house through a mortgage system in one of the Western countries. Nevertheless, shedding a light to the determination of the formula, it is required one to sign such a contract with certain conditions. Majlis al-Ifta wa –Al—buhuth suggested certain conditions for the permissibility of the mortgage such as that the purchaser have no other shelter, and have no sufficient financial capacity to buy a house without mortgage.
They should also have the intention that the mortgage house will be their residential house, and not for business purpose. It must be also free from any other kind of corruption. These conditions are understood directly from the abovementioned jurisprudential formula. Thus, it applies to another Jurisprudential principle, which states: "what is permitted due to its necessity must be restricted to the level of necessity".
According to Imam Abu Hanifah and his followers, it is permissible to minority Muslims living with majority of non Muslim States to involve into business affairs with Usury, due to the following reasons: A. They are not sole decision makers, B. They are in immediate need of the business for earning life, especially when such Muslim person is to pay the Usury and not to receive it.
Muslims are not supposed to be the lowest class of nations. God says: "You are the best Community that has been raised up for people4". Thus, Muslims are required to be financially, intellectually and technically strong as they are required to be fit in every situation with the best manner. They are not
expected to lead any kind of problem, malicious or disastrous activities neither against themselves nor against others. The Prophet Peace Be Upon Him said: "the Islam-Muslims increase and never decrease". He also said "Islam should be above and none to be above it".
In fact, the idea of Mortgage prohibition in the Western countries serves against Muslims and Islam as a reflection. It prohibits Muslims to survive in the Western countries, while no body forced them to be so. Instead, it makes them burden upon respective Western Governments by letting them remain under the application of Social Assistances and making them left behind. This wrong idea attracts homelessness, joblessness, lack of education, and lack of socio-political awareness as well as any kind of backwardness, which leads being burden upon others and slavery situation at the end of the day.
Nevertheless, in order to avoid any kind of dilemma, it is highly encouraged Muslims themselves to associate certain enterprises and companies that may deal with low income housing instead of mortgage. There are also some loopholes to avoid interest payment within the same system of mortgage.
Similar situation serves to a student loan taken for study purpose only. It seems unfortunate that, in this day’s civilization, some Islamic spiritual leaders prohibit young Muslims to enrol Western universities where loan taking seems inevitable. They inspire them that it is absolutely forbidden in Islamic Law without making comprehensive study on the matter and the circumstance. This lures the few non-drop-out Muslim students to devote themselves into labour jobs, in order to collect sufficient amount of money and go back to study. Again, a righteous student may never be successful to collect the required amount of money, due to their family’s financial restriction.
In fact, there are some strategies that Muslim students could manage their debt situation, when it comes to student loan. For example, should they restrict their needs in the educational budget only, it may go as partial loan, which they could afford to pay back before interest is charged.
In conclusion, usury is prohibited in Islam as well as in other divine religions including Judaism and Christianity, yet religious people should clearly comprehend the meaning of their religion’s aim and target in the first place. For instance, a Muslim person that is repugnant of taking loan with interest should first learn the ultimate target of Islam and Islamic Law (maqasid al-Shari’ah). They should evaluate their personal role in the usury: are they receiving or paying unwillingly? Do they have any other source? Can they survive without it? Do they have a choice? Is there a way that they can take the loan, but avoid interest? Etc. It is important to analyze the meaning of verse 275 in AL-Baqarah in order to demarcate between Riba and trade. In short, a Muslim person can take one of the literal meanings of "interest", which is "profit". If you have that meaning in your mind, you will consider that you are sharing business with the lender and you have to pay a fixed share out of your monthly profit.
Simple
Asalaamu Alaikum

 

[jimbo123]

@nightstar: That's a great clip. I love Nouman Ali Khan's lectures they all touch the heart, Mashallah!

@nature: Guidance Residential! This is exactly the kind of advice I'm looking for. Names of businesses. Now I just have to do my research on it. Yes I am from the UK, there tends to be a lot of stigma attached to council houses.

@hamza and abdul: These past few months I've been reading the Quran page to page in english translation with tafsir - I haven't done this before. From my understanding of the Quran, interest is only allowed if your life is in danger. Only because of this I am terrified of buying a house using a mortage. This was just my interpretation. Like you both said, the scholars have come out with different interpretations.

I was just thinking what would happen if every single muslim decided to rent instead of buying a house?
1. Eventually, more Shariah compliant schemes will be made to satisfy the demands of the muslims.
2. The bankers will not be making as much money (I'm looking at you Rothchild!)

 

[nature]

Asalaamu Alaikum, Allah says: "the God desires for you ease; He desires not hardship for you".

:wa:

Someone with a mortgage actually sed this to me last week, and that i was making it more difficult for myself ? but if theres alternatives shouldnt we try them first ?

@nature: Guidance Residential! This is exactly the kind of advice I'm looking for. Names of businesses. Now I just have to do my research on it.

Ive looked into this whole mortgage thing last few weeks. I can understand your worries and stresses, but the thing is i dont see anyway around it other than what ive mentioned previously. I think guidance residential is actually overseas and not a UK based company. although i suppose you could contact them & maybe they could advise you if they have any similar companies attached in the UK ? All i will say is, please make sure you do your homework before you commit to anything, from what ive seen halal mortagages arent really halal and im not too sure what this company's about, it was mentioned to me by another sister and from what she tells me there is no interest. Just make sure everything is halal before you commit to anything.

Yes I am from the UK, there tends to be a lot of stigma attached to council houses.

LOL! why ? what sort of stigma ? are you a snob too ? :hmm: only kidding. I actually used to think like this also years back, but i can assure you they aint that bad. I did a quick search in my area, and im able to bid for 3- bedroom houses, that arent that bad, & look very presentable. Before dismissing council housing, completely, take 5 mins out today, & just have a look at your local council housing website, and put your criteria in, & see what you get. also theres the added security with council housing.

hope this helps.

:wa:

 

[nature]

From my understanding of the Quran, interest is only allowed if your life is in danger. Only because of this I am terrified of buying a house using a mortage.

your lifes not in danger though is it ? this isnt an excuse to do haram. if you didnt have a roof over your head, and had tried AFTER every halal way, only then would you be able to go to haram, as in that case it would no longer be haram. but you shouldnt go haram because of its easier/gona save you money etc.

Is a mortgage halaal? No. Is it permissible under extreme duress? Yes (you can even eat pork under extreme duress).

Quit worrying about the future, only Allah knows the future. check out your local housing scheme first and work from there. Im glad i actually looked into this when i did, cos otherwise i would have ended up doing haram without even realising.

Personally i wouldnt want Allah to be at war with me. Think about it, Allah is at WAR with those who do riba... Allah is not at war with many people.. but He is at war with those who do riba. Avoid riba like you avoid disbelief, like you avoid zina, like you avoid murder, because in Allah's eyes, riba is very serious. (thats warning enough for me).

:wa:

 

[jimbo123]

your lifes not in danger though is it ? this isnt an excuse to do haram. if you didnt have a roof over your head, and had tried AFTER every halal way, only then would you be able to go to haram, as in that case it would no longer be haram. but you shouldnt go haram because of its easier/gona save you money etc.

I know, it's not an option anymore.

I can't find much information about Guidance Residential. According to this website (http://www.islam.tc/cgi-bin/askimam/ask.pl?q=7839&act=view) it has something to hide.

Lol I'm not a snob. I don't know that much about council housing. I just get this image in my head of a group of kids with knives and hoodies and druglords!

 

[nature]

I can't find much information about Guidance Residential. According to this website (http://www.islam.tc/cgi-bin/askimam/...=7839&act=view) it has something to hide.

I didnt look in2 it myself cos it was just suggested to me by another sister, so i dont know much about it. that site suggests theres interest involved ? but its from 2003, so unless things have changed i really dont know. You could contact them ?it wasnt something i myself was interested in. What I understand of the company is that you are co-owners of the home. They buy it and you pay them back for it. They set a rate that you pay buy it from them at. I recommend you read about their policies and see how it sits with you. I understood that they have investors who buy the homes and you are both co-owners. Just dont commit to anything if your unsure its halal.

Lol I'm not a snob. I don't know that much about council housing. I just get this image in my head of a group of kids with knives and hoodies and druglords!

LOL! thats what everyone used to think years back. Its really not like that anymore, you can get good council homes in posh areas too. I think you would be suprised how much things have changed. Have a look online and see whats available in your area.

hope this helps.

:wa:

 

[Muezzin]

If you really don't want to ever contemplate a mortgage:

1) Consider purchasing a property on leasehold (i.e. renting a property for a term of years, plus it's relatively simple to renew many leases)

2) Some sellers are open to being paid in installments, although they will probably only agree to this if the total of those installments is greater than their original asking price, and if you have a good credit rating etc.

3) Get an 'Islamic' loan (if you can actually find a genuine one) to help cover the costs of the purchase.

 

[jimbo123]

If you really don't want to ever contemplate a mortgage:

1) Consider purchasing a property on leasehold (i.e. renting a property for a term of years, plus it's relatively simple to renew many leases)

2) Some sellers are open to being paid in installments, although they will probably only agree to this if the total of those installments is greater than their original asking price, and if you have a good credit rating etc.

3) Get an 'Islamic' loan (if you can actually find a genuine one) to help cover the costs of the purchase.

Yeah, I've been thinking about the number 2 option. When I first heard it I thought hmmm will people really be willing to do that?