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**FuXA8nQM** · 10-25-2011, 11:03 PM

i don't know how this loan stuff works, most people in the UK for example have a house on interest, some of them are using Islamic mortgages but others argue this is the same thing they have just disguised the interest as profit but you end up paying the same if not more on top the house value

with renting people say that its not as secure because one day you will need to retire and won't be able to afford the rent any more so its better to buy a house and pay off the mortgage by the time you retire

then there are taking loans from Muslims, but the value of money is always decreasing so if someone was to lent me 80K 10 years ago, i could have got a house with that, then when i finally pay it back 10years later the house prices have gone up to 250K so that money then doesn't have the same value it had 10years ago

it's like they have set up such a system that there is no way out

ASAK,

This is a very critical point! In the current banking system since the money is not backed by a tangible asset (such as gold etc), it tends to depreciate with time as inflation increases the price of most of the items in the system. So if someone has saved a lot of cash and is not taking interest, their money will lose value at the rate of inflation (which is always underreported). Since in Islam one cannot make money on money (I think someone has to buy an asset with money and then sell it at profit or loss to make or lose money) the current system that compensate for this loss of value is not allowed.

Therefore, anyone investing funds in Halaal housing has to structure this in such a way where this depreciation can be compensated, some profit is realized for the investors, and the folks buying house should be able to deduct some of their expenses as mortgage interest deductible (why pay money to the government - thats how guidance and Lariba structure their "rent to own" loan program). Amin housing co-operative (http://www.ameenhousing.com/) is one such example where people pool their money and help themselves and others buy houses, but overall I have not looked at them so I could be wrong. I am not sure whether Amin sell their mortgage portfolios to Fredie and Fannie like Lariba and Guidance to raise additional funds. So at least at the backend there is interest involved.

10-25-2011, 11:03 PM	#13
FuXA8nQM Join Date Oct 2005 Posts 586 Senior Member	i don't know how this loan stuff works, most people in the UK for example have a house on interest, some of them are using Islamic mortgages but others argue this is the same thing they have just disguised the interest as profit but you end up paying the same if not more on top the house value with renting people say that its not as secure because one day you will need to retire and won't be able to afford the rent any more so its better to buy a house and pay off the mortgage by the time you retire then there are taking loans from Muslims, but the value of money is always decreasing so if someone was to lent me 80K 10 years ago, i could have got a house with that, then when i finally pay it back 10years later the house prices have gone up to 250K so that money then doesn't have the same value it had 10years ago it's like they have set up such a system that there is no way out ASAK, This is a very critical point! In the current banking system since the money is not backed by a tangible asset (such as gold etc), it tends to depreciate with time as inflation increases the price of most of the items in the system. So if someone has saved a lot of cash and is not taking interest, their money will lose value at the rate of inflation (which is always underreported). Since in Islam one cannot make money on money (I think someone has to buy an asset with money and then sell it at profit or loss to make or lose money) the current system that compensate for this loss of value is not allowed. Therefore, anyone investing funds in Halaal housing has to structure this in such a way where this depreciation can be compensated, some profit is realized for the investors, and the folks buying house should be able to deduct some of their expenses as mortgage interest deductible (why pay money to the government - thats how guidance and Lariba structure their "rent to own" loan program). Amin housing co-operative (http://www.ameenhousing.com/) is one such example where people pool their money and help themselves and others buy houses, but overall I have not looked at them so I could be wrong. I am not sure whether Amin sell their mortgage portfolios to Fredie and Fannie like Lariba and Guidance to raise additional funds. So at least at the backend there is interest involved.
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