Islamic Mortgages

nmiah786

This is one for all you brokers on here. Do any of you have any personal experience with dealing with Islamic Mortgages.

I'm interested in finding out how much their monthly cost works out when compared to a conventional mortgage.

Also what sort of "interest" rate do they use as comparables. I see Alburaq seems to use the LIBOR rate as a benchmark.

Also, what sort of income multiple do they work with or is it based on affordaility.

Any experience you have in this subject would be greatly appreciated.

Thanks in advance.

herbiesjp

I personally have not dealt with any of these.

I have has a search for you and found the follwoing site: it explains the various types and has a mortgage calculator

http://www.islamicmortgages.co.uk/index_learnmore.html

Not connected to them and not a recommendation - just helping out with some info

HTH

zincoxide

This looks more appealing than UK mortgaging - especially for a first time buyer like myself - but since I've never heard of them would like to hear the advice of a mortgage advisor.

nmiah786

herbiesjp wrote:

I personally have not dealt with any of these.

I have has a search for you and found the follwoing site: it explains the various types and has a mortgage calculator

http://www.islamicmortgages.co.uk/index_learnmore.html

Not connected to them and not a recommendation - just helping out with some info

HTH

Thanks for the link, its definately been helpfull, didnt know West Brom did one too!

Personal experience anyone!

ALso what do most people think on the LIBOR rate.....

payless

nmiah786 wrote:

Thanks for the link, its definately been helpfull, didnt know West Brom did one too!

....

But I gave you this info before http://forums.moneysavingexpert.com/showthread.html?t=145002&page=2&pp=20

nmiah786

payless wrote:

But I gave you this info before http://forums.moneysavingexpert.com/showthread.html?t=145002&page=2&pp=20

Payless

Apologies, I must admit that I did not read your follow up on that thread and also at the time I did not quite equate WBBS to West Brom BS

Anyway, I've been looking at Islamic Mortgages more in depth recently with a view to getting one so any information that you mentioned on the other thread would be much appreciated (contact numbers/email address/websites for dealing direct with those lenders).

Thanks in advance.

black-saturn

Im not Islamic but would I be allowed to have an Islamic mortgage? I'm originally from West Brom so that might account towards something.

nmiah786

black-saturn wrote:

Im not Islamic but would I be allowed to have an Islamic mortgage? I'm originally from West Brom so that might account towards something.

I'm sure its open to all regardless of faith????? Would be worried if it wasnt???

*Sparkle*_3

nmiah786 wrote:

I'm sure its open to all regardless of faith????? Would be worried if it wasnt???

But surely you have to be Islamic to get a Islamic mortgage??
- like any other mortgages you will have to fit a certain critera otherwise what's the point?

Why dont we all do it to avoid interest??

nmiah786

*Sparkle* wrote:

But surely you have to be Islamic to get a Islamic mortgage??
- like any other mortgages you will have to fit a certain critera otherwise what's the point?

Why dont we all do it to avoid interest??

IMHO these lenders are assesing your financial standing before deciding whether or not they give you a mortgage, being a Muslim is not one of the criteria as far as I can see.

I dont think you will avoid paying "interest", you will be paying either rent on the percentage you dont own or be paying Acquisitions Cost (divided by the term of the ortgage) as well as your normal monthly payments. Some may interpret this as paying "interest" via a conventional mortgage.

If you compare an Islamic mortgage against a conventional Mortgage you might find that the overall cost is similar. So some might say "whats the point"?

Well thats exactly what I'm trying to figure out. Paying or receiving interest is forbidden in Islam. Some are of the view that paying Rent/Acquisition Cost is effectively paying interest on the mortgage just a different name. Some are saying it is allowed because you are effectively paying Rent on the part that you dont own, which is allowed. There are so many rules and some many interpertation hence it has taken soo long for such products to becoming available. Also, AFAIK, they are constantly tweaking the products to make it more Shariah (rules and regulations in Islam) Compliant.

Woby_Tide

I'd imagine the overall cost of an Islamic mortgage will always tend to be higher than an average than high street mortgages. They will undoubtedly follow along the lines of banks SVR mortgages and are unlikely to take into account th fact that with todays current mortgage market the offers available and ability to remortgage (i.e I doubt an Islamic mortgage will factor in someone remortgaging every 2/3 years to a low fix rate for example). I'm actually surprised more banks don't offer them as they are probably more profitable than normal mortgages over time, but the risk is that they have to work out 25 year interest rates and factor in property prices