Islamic Bank of Britain 3.99% Fixed for Term

Codman

Hello,

I've seen this mortgage deal with the Islamic Bank of Britain, has anyone else looked into it? Something seems a bit fishy to me - it seems a bit too good to be true. Can anyone spot the catch?

Apologies if it has been discussed elsewhere, but my trawl through the threads didn't find anything!

Thanks

Cod

beecher

From their website

http://www.islamic-bank.com/islamicbanklive/HomeFinance/1/Home/1/Home.jsp

Up to 70% FTV : 3.99% fixed until September 2010 reverting to Base Rate +2.99%

Only fixed til next year and then 2.99% above base rate. Not that great a deal if you ask me.

Thrugelmir

Codman wrote: »

Hello,

I've seen this mortgage deal with the Islamic Bank of Britain, has anyone else looked into it? Something seems a bit fishy to me - it seems a bit too good to be true. Can anyone spot the catch?

Apologies if it has been discussed elsewhere, but my trawl through the threads didn't find anything!

Thanks

Cod

It enables a group of people who couldn't normally obtain a mortgage to do so. The bank is regulated like any other in the UK. So no issues if its a product that suits your needs.

RufusA

Codman wrote: »

I've seen this mortgage deal with the Islamic Bank of Britain, has anyone else looked into it? Something seems a bit fishy to me - it seems a bit too good to be true. Can anyone spot the catch?

It's not a mortgage, it's a very different beast from a home loan.

Instead of buying a property, taking out a loan and paying interest on that loan (with the bank having a mortgage on the property). You and the sharia bank buy the property together (like a DIYSO). You own 20% of the property, the bank own the rest. You pay rent on the 80% they own, and over time they hand back some of the property to you. Until at year 25 you own all of it.

Very interesting from a legal point of view, would like to know:

1) What happens with rises and falls in house prices? Does the bank share the risk equally. For example if you put in a £20k deposit and house prices fell 10% would you lose £10k or 10% of £20k i.e. £2k. Similarly if house prices rose, would you and the bank share the increase proportionally?
2) Who has legal control of the property. i.e. If you wanted to build an extension, sell up etc. would it be dependant on the bank agreeing fully?

The devil is in the detail!

Rufus.

inspector_monkfish

Codman wrote: »

Hello,

I've seen this mortgage deal with the Islamic Bank of Britain, has anyone else looked into it? Something seems a bit fishy to me - it seems a bit too good to be true. Can anyone spot the catch?

Apologies if it has been discussed elsewhere, but my trawl through the threads didn't find anything!

Thanks

Cod

the catch is, you have to turn your house into a mosque

ninky_2

inspector_monkfish wrote: »

the catch is, you have to turn your house into a mosque

so do people with 'normal' capitalist mortgages have to turn their house into a stock exchange?

i think the idea of sharing the risk and return between lender and lendee is a good one. although in many ways i wonder if this loan is all that different - in effect, if you have a mortgage you don't really own you home either and are 'renting' it back from the bank.

i'd be interested in knowing what happens to those who default on payments. in iran defaulting on a loan is taken very seriously as is writing a cheque which cannot be honoured and can end in prison.

Gorgeous_George

Codman wrote: »

Hello,

I've seen this mortgage deal with the Islamic Bank of Britain, has anyone else looked into it? Something seems a bit fishy to me - it seems a bit too good to be true. Can anyone spot the catch?

Apologies if it has been discussed elsewhere, but my trawl through the threads didn't find anything!

Thanks

Cod

Mmmm... something fishy indeed. I suppose it might help you to buy a plaice of your own.

Or it could all be pollocks.

GG

Peelerfart

inspector_monkfish wrote: »

the catch is, you have to turn your house into a mosque

Now now inspector , you don't want a fatwa now do you ? :beer:

Conrad

Can aethiests apply? Seriously.

ninky_2

Conrad wrote: »

Can aethiests apply? Seriously.

absolutely. they say it is open to muslims and non muslims alike.

handful

ninky wrote: »

absolutely. they say it is open to muslims and non muslims alike.

Yes but what they don't tell you is the house you are buying has to have a sunni outlook and brick shi-ite house in the garden.;)