[prpaims]

Asslamu ‘Alaikum,

Hope all are well.

Just wanted some advice and guidance in regards to taking conventional mortgages.

I am currently renting in London on an intermediate rent scheme by a housing associate at 80% of market rent. As you will appreciate the rent in London is high and even on 80% market rent you can end up paying quite a bit.

If I pay a little bit more a month, I can buy a share in my property on a Part Buy Part Rent basis where I get to own a part of the property and as my financial situation improves I can buy the property outright by increasing my share in the property.

As the property values are pretty stagnant at the moment and the interest rate is low I was considering buying a share in the property that I live in so that at least a some of my monthly outgoings will go towards a stake in the property.

However, the only way that I can buy a share in the property is by getting a conventional mortgage as the Islamic Mortgage providers do not provide mortgages for Shared Ownership / Part Buy Part Rent schemes.

With the current housing market as it is and the current mortgage deposit requirements of 20%+ I will never be able to buy on the open market as I’ll need a deposit of around £40K to get a mortgage for a property worth £200K and this is kind of the price range for a decent 2/3 bed property in East London.

I don’t want to be renting all my life as it does not give me any security in tenure and once my tenancy/contract runs out I’ll have to keep moving. However, I am also aware that getting a conventional mortgage would be classed as Haram by most scholars and the thought of having the wrath of Allah upon me for the duration of the mortgage period (25 years or so) scares me.

Do I just give up on the idea of buying a place and securing a home for myself and my family or is there an exception to the rule in my situation?

In Sacred Law in Secular Lands Shaykh Abdullah bin Bayyah mentions that there is an opinion that allows Muslims in Non-Muslim lands to purchase properties that is their principle home using the conventional mortgages when there are no alternatives available (he does stress that this should be a last resort). I am interested in finding a source for this Fatwa? Does anyone know how many scholars hold this view and if these Fatwas are available for reading online.

I will stress that I am not trying to find an easy way out and look for a Fatwa that allows me to purchase a flat/house. However, if there is a genuine and valid Fatwa out there, I would like to have a read and make up my own mind.

I appreciate this is a long post, but would appreciate any advice that you can offer.

Was Salam

Jashim

[WeestDype]

Walaikumus salam,

You might want to check Mufti Ebrahim Desai's (www.askimam.org) website for a fatwa regarding your problem. If you don't find a solution, you can always email them or ask a scholar in your locality.

[Goooooblin]

br. drjash,

Have you looked into diminishing Musharakah from one of the Islamic Banks? It helps you do just that with the shar'i mortgage system. Please read through the chapter on dimishing musharakah in Mufti Taqi Saheb's "Introduction to Islamic Finance".

Here is a brief info about it from Mufti Ebrahim Desai's talk. (Sorry for the poor quality)

[prpaims]

br. drjash,

Have you looked into diminishing Musharakah from one of the Islamic Banks? It helps you do just that with the shar'i mortgage system. Please read through the chapter on dimishing musharakah in Mufti Taqi Saheb's "Introduction to Islamic Finance".

Here is a brief info about it from Mufti Ebrahim Desai's talk. (Sorry for the poor quality)

Unfortunately these products are not available for the shared ownership part buy part rent homes available in the UK.

What are the knowledgeable brothers views on the Fatwa below:

http://www.eshaykh.com/halal_haram/p...der-necessity/

Particularly the part about the earlier Hanafi Jurists allowing interest based transactions in non-muslim countries?

Thanks for all your help. May Allah bless you all.

[aspinswramymn]

as-salamu `alaikum sidi,

That was to do with taking interest not giving interest - abuH can correct me if I'm wrong. Also that fatwa is from years ago - I don't even think there were other halal options at that time.

Anyway I don't think you've got all your facts right. I've got HSBC amanah home finance and a good friend of mine has the Lloyds one.... I am pretty sure that when I last looked into all of this a few years ago you didn't need 20% down payment but only 10%. Have you actually arranged to meet their financial advisors?

With my scheme we part own / part rent the property which is similar to what you described... I would avoid the conventional mortgage if I were you. Also, aren't you a doctor? Save up for a while I'm sure you'll be able to collect enough for a deposit even if it is 20% for HSBC/Lloyds/Islamic bank. Of course some people even dispute whether these halal mortgage schemes are allowed but at least you'll have the Mufti Taqi stamp and less guilt insha'Allah

was-salam

[prpaims]

as-salamu `alaikum sidi,

That was to do with taking interest not giving interest - abuH can correct me if I'm wrong. Also that fatwa is from years ago - I don't even think there were other halal options at that time.

Anyway I don't think you've got all your facts right. I've got HSBC amanah home finance and a good friend of mine has the Lloyds one.... I am pretty sure that when I last looked into all of this a few years ago you didn't need 20% down payment but only 10%. Have you actually arranged to meet their financial advisors?

With my scheme we part own / part rent the property which is similar to what you described... I would avoid the conventional mortgage if I were you. Also, aren't you a doctor? Save up for a while I'm sure you'll be able to collect enough for a deposit even if it is 20% for HSBC/Lloyds/Islamic bank. Of course some people even dispute whether these halal mortgage schemes are allowed but at least you'll have the Mufti Taqi stamp and less guilt insha'Allah

was-salam

Dear Faqir,

The shared ownership scheme that I was referring is different to the one offered via the Islamic Finance model.

The one I am talking about is the one that is commonly sold by Housing Associations in the UK:

http://www.housingoptions.co.uk/ho2/ho2/what_is_SO.asp

As for 10% deposit, those days have long gone since the credit crunch hit. Islamic Bank of Britain require a 20% deposit on their standard product and 30% deposit on their fixed product. HSBC Amanah require 35% deposit for their mortgages. I couldn't find anything on Loyds TSB website.

Thanks for the advice anyway.

And by the way, I am not a Dr

Was Salam

[peakyesno]

Asslamu ‘Alaikum Jashim,

Brother, I am in the same situation as you were. Could you please let me know the outcome of your reseach. May Allah give you the best reward for this.

Salaam

Muhammad Khan

Asslamu ‘Alaikum,

Hope all are well.

Just wanted some advice and guidance in regards to taking conventional mortgages.

I am currently renting in London on an intermediate rent scheme by a housing associate at 80% of market rent. As you will appreciate the rent in London is high and even on 80% market rent you can end up paying quite a bit.

If I pay a little bit more a month, I can buy a share in my property on a Part Buy Part Rent basis where I get to own a part of the property and as my financial situation improves I can buy the property outright by increasing my share in the property.

As the property values are pretty stagnant at the moment and the interest rate is low I was considering buying a share in the property that I live in so that at least a some of my monthly outgoings will go towards a stake in the property.

However, the only way that I can buy a share in the property is by getting a conventional mortgage as the Islamic Mortgage providers do not provide mortgages for Shared Ownership / Part Buy Part Rent schemes.

With the current housing market as it is and the current mortgage deposit requirements of 20%+ I will never be able to buy on the open market as I’ll need a deposit of around £40K to get a mortgage for a property worth £200K and this is kind of the price range for a decent 2/3 bed property in East London.

I don’t want to be renting all my life as it does not give me any security in tenure and once my tenancy/contract runs out I’ll have to keep moving. However, I am also aware that getting a conventional mortgage would be classed as Haram by most scholars and the thought of having the wrath of Allah upon me for the duration of the mortgage period (25 years or so) scares me.

Do I just give up on the idea of buying a place and securing a home for myself and my family or is there an exception to the rule in my situation?

In Sacred Law in Secular Lands Shaykh Abdullah bin Bayyah mentions that there is an opinion that allows Muslims in Non-Muslim lands to purchase properties that is their principle home using the conventional mortgages when there are no alternatives available (he does stress that this should be a last resort). I am interested in finding a source for this Fatwa? Does anyone know how many scholars hold this view and if these Fatwas are available for reading online.

I will stress that I am not trying to find an easy way out and look for a Fatwa that allows me to purchase a flat/house. However, if there is a genuine and valid Fatwa out there, I would like to have a read and make up my own mind.

I appreciate this is a long post, but would appreciate any advice that you can offer.

Was Salam

Jashim

[prpaims]

Asslamu ‘Alaikum Jashim,

Brother, I am in the same situation as you were. Could you please let me know the outcome of your reseach. May Allah give you the best reward for this.

Salaam

Muhammad Khan

Dear Muhammad,

The ovewhelming advice from people was to stay away from the conventional mortgage, if at all possible. It is better to rent in the private rented sector (or social rent if you're eligible for council/housing association house) than to take out an interest based mortgage that you are tied into for 15/30 years.

I am lucky enough to be able to bid for council properties whilst I am renting and therefore I am praying that Allah grants me one of those without the need to go into a conventional mortgage to buy a property.

However, if your situation is that without purchasing a property you will be made homeless, then there is a Fatwa that due to your necissity you are able to purchase a home to live in with you and your family:

http://www.globalwebpost.com/farooqm...a_mortgage.htm

I hope this helps and may Allah help you in your situation - ameen!

Was Salam