Halal (lawful) Mortgage

danmanchester

Hmmm I wonder if the Vatican Bank would do me a Christian mortgage..on the understanding that I'd pay up in full when I get to heaven....:A ...
just a thought:D

Moorepart

Can somebody tell me what haram Is????????

tiger

haram are those things that are not permitted under islamic law

margaretclare

I really don't know how this works. Everything in this world works for profit, the profit is what pays wages, provides workplaces, pays pensions. We normally pay interest on a mortgage because, otherwise, why would any bank/building society be interested in lending us the money? And where would the money come from in the first place?

In this house we are committed Christians, we get interest on our savings and we have a 'lifetime mortgage' with interest rolling-up to be paid off after the death of the second of us. Without that, we wouldn't have a house to live in.

Can't see what is so wrong about it all. Except that, of course, we disapprove of the 'preying on the vulnerable', excessive interest and unethical practices of the doorstep lenders.

Aunty Margaret

EdInvestor

Basically the rule is part of an effort by Islam to ban usury - loan sharking- the exploitation of the poor, which I seem to remember was a concern of Jesus as well

The West Bromwich BS also has a sharia compliant mortgage I believe.

margaretclare

Editor wrote:

Basically the rule is part of an effort by Islam to ban usury - loan sharking- the exploitation of the poor, which I seem to remember was a concern of Jesus as well

Yes, of course we disapprove of exploitation of the poor, of which loan-sharking is a good example. And yes, we do remember Jesus's words and we do our best not to involve ourselves in exploitation. However, I still don't see who is going to lend you money to buy a house unless they get something out of it i.e. interest. Remember the first building-societies were basically 'self-help' groups, and the first banks in the modern era, Lloyds etc, were Quakers, who were so ethical that they could be trusted.

Aunty Margaret

Poppy9

margaretclare wrote:

..... And where would the money come from in the first place?......

That's a very good question - where did money come from in the first place? More to the point when prices rise where does the extra money come from? Do the B of E just print more notes. How much cash is there actually in circulation? Most money is just a number on a computer screen. If everyone went into their bank today and emptied all their accounts the banks wouldn't be able to pay us. Its a bit of a joke really banks use our money to lend to other people and charge interest on it as if it was their own money.

YorkshireBoy

Poppy9 wrote:

Its a bit of a joke really banks use our money to lend to other people and charge interest on it as if it was their own money.

This is why they can offer you free banking!

Would you rather they charged you to manage your SO's and DD's, charged you, say, £10 for the 30 cheques in your cheque book, a fiver a time for sending your statement, or charged you £60/hour for consultations (like solicitors do)?

If we manage our accounts properly, we are quids in with free-banking!

zabbyh

Debt_Free_Chick wrote:

As an aside, isn't the term Halal only relevant to meat? The term for Islamic law being Sharia?

Halal refers to everything. Everything you can do. For example eating a certain sweet may have gelatine it is haram (not allowed), but if that sweet contains alcohol and no meat it is again haram. It also refers to actions for example it is haram to swear i.e. it is wrong etc. Halal in reference to meat means it has to be slaughtered a specific way. Just clarifying.

Anyway the islamic mortgages aren't much different to normal mortgages. The only way they are sharia compliant is because they agree with an amount of money that you will be charged on top of each payment before you take out the mortgage. They call it "rent". The only difference is it is a fixed amount unlike normal mortgages where the amount you pay on top is dependant on interest rates at that time and fluctuates a lot.

tiger

aunty margaret i think you have a valid point, but look at it this way.who borrow money?who pays interest? do you know what is gonna happened to the interest rate say in 10 years time?

the principal of halal doesnt mean you can borrow or lend or get profit from what you lend.its purely halal (allowed) for some one get morgage or lend money but that shouldnt be say at 10% interest.it should be based on the profit.for example if its halal bank and youhav a saving with them,they invest your money and at the end of the finnancial year the declear the profit.fromthis profit you get your share of profit depending on your investiment.not telling you that you will get 10% upfront.this is the halal principle.