Islmaic Mortage for a non believer?

snapdragon69

I'm sure most people are aware of the Sharia-compliant muslim mortgages, where instead of paying interest, the building-society buys the house and rents it to you at a profit for 25 years and then gives it to you.
I am told that the people who have these mortgages often find themselves unemployed at which point they get the RENT paid for indefinately (with certain limits on the monthly payments) by Housing Benefit welfare, whereas with a conventional mortgage you have to wait so many months and then they will give you so much towards the mortgage for a set period of time, so usually you lose the house. I have no intention of becoming unemployed, but with an increasingly likely recession in the next four years, maybe this is a sensible precaution. Has anyone any experience of this, will they want proof I am a muslim (I'm not)? Who does it apart from HSBC?
Thanks.

MarkyMarkD

I don't believe that what you are suggesting is a financially viable solution unless you are a really poor risk.

Due to the lack of competition for "muslim mortgages" the amount you pay "over the odds" in rent is likely to be significantly more than the amount you would pay on a mortgage.

In much of the UK, rental payments are more than mortgage payments anyway. And on a "muslim mortgage" you pay the market rent PLUS something to compensate for the fact you aren't paying interest on the loan.

Instead of doing this, you could buy a competitive mortgage, and competitive payment protection insurance which would cover your mortgage payments if you lost your job - you can buy this cover online or from IFAs at very reasonable rates.

EMcG

Are these mortgages really a question of semantics? Seems to me that the 'rent' you pay the bank after it has bought the house is just an ordinary repayment mortgage given a different name?

If what you were paying out really was 'rent' then why would the bank just give you the property after 25 years?

Confused.

amcluesent

One other interesting feature of Islamic 'mortgages' is that the bank initially owns the house. The (capital) repayments you make increase the proportion of the house you own, while the (pseudo)interest payments are the rental on the proportion the bank owns.

Now suppose you buy using one of the these mortgages and there is a house price crash. Who owns the property and hence the risk? Sounds to me like the bank does! You can walk away, the negative equity is with the bank - might be a good option in these uncertain times!

I_Claudius

LizEstelle wrote:

Absolutely spot on.

So called 'islamic mortgages' are simply the application of paper shuffling in order to disguise the fact that money IS being borrowed and that interest IS being applied.

It is a contrivance to provide a sop to the conscience of religious zealots.

The same thing applies to halal and kosher meats - the butchers concerned know all too well that air-borne molecules of bacon fat from the rotisserie down the road are certainly landing by the million on their 'correctly slaughtered' stuff... it's impossible to stop this except by using the kind of laboratory conditions under which microchips are manufactured ....thereby rendering it, of course, 'unclean'.

Still, we mustn't disabuse these people from their cherished, absurd beliefs by pointing out the blindingly obvious, must we? That would be a political no-no.

sorry, but i find the the snidey tone of your post pretty unpleasant

the implication that all people who keep their diet kosher or halal are religious zealots is both untrue and offensive

To write off judaism and Islam as 'absurd beliefs' in a single sentence on a internet forum is pretty bad form, but you are of course entitled to your beliefs as indeed are jews and muslims.

I presume you find the celebration of easter and xmas equally infuriating and nonsensical, relying as they do on believing in virgin birth and people rising from the dead?

I think this debate is beyond the realms of a money saving forum but i felt compelled to reply as your (imo) pretty bigoted post left a bad taste in my mouth.........

btw i presume that by your logic all vegetarians (especially those crazy buddhist / hindu vegetarians) are kidding themselves also as they must regularily have molecules of meat fat landing on their food also. They might as well give up eh?

amcluesent

Can we get back OT and discuss whether 'Islamic' mortgages offer a more attractive risk-profile if the market goes pear-shaped?

BTW, if so, do the shareholders in the institutions going after the Muslim buyer know that they are reducing the financial soundness of the company?

dkny_2

LizEstelle wrote:

Absolutely spot on.

So called 'islamic mortgages' are simply the application of paper shuffling in order to disguise the fact that money IS being borrowed and that interest IS being applied.

It is a contrivance to provide a sop to the conscience of religious zealots.

The same thing applies to halal and kosher meats - the butchers concerned know all too well that air-borne molecules of bacon fat from the rotisserie down the road are certainly landing by the million on their 'correctly slaughtered' stuff... it's impossible to stop this except by using the kind of laboratory conditions under which microchips are manufactured ....thereby rendering it, of course, 'unclean'.

Still, we mustn't disabuse these people from their cherished, absurd beliefs by pointing out the blindingly obvious, must we? That would be a political no-no.

Exactly what has halal and kosher meats got to do with the original posters question?

It is quite obviously that you know little of the islamic faith, this is a money forum and not open to debate regarding different cultures - have some respect!!! by the way i am not a muslim, but i feel your post was rather ignorant and disrespectful! :mad:

dkny_2

In reply to the original post, how would one prove or disprove if you are muslim. In the same way how would you prove you are a christian?

As long as you meet their criteria then there is no reason they can refuse you the product. HTH

Good luck

thehairybuilder

so , with I Claudius & DKNY finding it neccessary to ram their own unrelated opinions on the original question down our throats it seems no-own has an answer for you snapdragon.

I`ve never heard of this type of `mortgage` but will be watching this thread with intrest

Hairy

dmg24

Whilst I don't have in depth knowledge of this type of mortgage, I do think that your logic makes a lot of sense, and could be an area to be (dare I say it?!) exploited.

With regard to whether you would need to prove your religion or not, I don't believe that you would, as this would be discrimination on the grounds of religion.

Do keep us updated if you get any further information, and it may be something that Martin will be interested in pursuing?

_Andy_

I was working for HSBC when they introduced that range. I distinctly remember one racist moron ringing up and saying how she wanted "one of them interest-free mortgages they do for pakis"...Ah, how I love our great, intelligent countrymen.

Anyway, AFAIK non-Muslims are quite entitled to take that product if they so wish.

More info on the HSBC range here

http://www.hsbcamanah.com/hsbc/amanah