Why to Consider the Islamic Home Financing?
The Shariah home buying procedure through the Islamic finance companies offers the Muslim home owners or the prospective home buyers the benefits, which the conventional lending mostly lacks. The ethical manner of Islamic home financing, which is less likely to foreclose and competitive offers the homeowners the soundness of the heart and mind while allowing them to focus more on the things, which matter like work, family and the community.
Islamic home financing-why it is different?
Often the Muslim homebuyers wonder whether the Islamic mortgage loans are truly better than the conventional mortgages and why to choose these loans. To answer your queries, here in this article, we have put together some of the reasons why the Islamic home loans are better than the conventional home loans for the Muslim homeowners.
Reasons to choose the Islamic home financing:
- This financing is riba free: Islamic finance is built upon the fundamentally different foundation than the conventional lending. The conventional lending is mainly based on the Interest or Riba that is prohibited in the Islamic faith and also has the trend to become exploitative. The Islamic finance companies can’t lend money for making profit as according to the Shariah law, making money in exchange of money is completely prohibited.Here the homeowners work as investor purchasing stock in the company over the time until and unless they get complete ownership of the tangible asset or the home. The best part of this loan is that it is not only Shariah compliant, but also it is riba–free and affordable like the traditional mortgage.
- This type of financing is less likely to foreclose: Considering the fact that the conventional lenders are driven to make more money on the exchange of money, often they are not incentivized financially to help the homeowners from foreclosing while they default on the payments. Coincidentally, like as the traditional financing was under the huge scrutiny for the issues that was causing curiosity about the Islamic mortgage loans peaked.
- This financing is very affordable: As the main motive of the conventional lender is to make money on the exchange of the money, therefore the compounded interest becomes a really powerful tool to drive up the profits at the expense of the homeowners. On the other hand, the Islamic home financing is entirely based on as well as limited by the Shariah in how this can derive the profits so making the money off of the compounded interest is not the right option.