Islamic Mortgage

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Islamic Mortgage

A mortgage made according to the sharia, or Islamic law, which forbids the payment or receipt of interest. An Islamic mortgage may be an interest-free loan, but often it is a more complex transaction. For example, a bank could buy a house for cash and then re-sell it to the "borrower" for a profit through amortized payments such that the profit is the same as the bank would have made had it extended a regular loan. Other types involve the bank becoming a partner with the "borrower" so that both co-own the house or business, a scenario in which the borrower gradually buys the bank's share of ownership with a series of payments.
References in periodicals archive ?
Furthermore, Help to Buy will now apply to Islamic mortgages, which is a big boost to Islamic homeowners as traditionally their mortgages have been regarded as being more expensive.
HPPs are a Sharia law compliant alternative to mortgages and are often referred to as Islamic Mortgages, Sajid Javid, the financial secretary to the treasury said.
Help to Buy Islamic mortgages will be provided by the Islamic Bank of Britain, which is owned by Qatar's second-largest bank, Masraf Al Rayan (MARK.
Home Purchase Plans (HPPs) are a Sharia law compliant alternative to mortgages and are often known as Islamic Mortgages .
We have already removed the double tax on Islamic mortgages and extended tax relief on Islamic mortgages to companies as well as individuals, and just last week we made new commitments to open up new forms of student loans and business start-up loans for Islamic students and entrepreneurs," he said.
In the United Kingdom, Islamic mortgages have been structured under two different contracts.
The Cagamas ICPs will be issued under the Islamic Commodity Murabahah structure on 25 March 2013 and proceeds from the issuance will be used to fund the purchase of Islamic mortgages from the financial system.
To comply, interest is not paid on Islamic savings or current accounts or applied to Islamic mortgages.
Prospects for further growth in Islamic mortgages in Canada seem encouraging with the Muslim population projected to grow as a percentage of the Canadian population from approximately two per cent currently, or 1 million Muslims, to as many as 6 million Muslims, or six per cent of the Canadian population in 2031.
The industry has also witnessed increasing number of non-Muslims availing Islamic mortgages reflecting inclusive approach of Islamic finance,' he added.
However, for Islamic mortgages, "it is possible public auctions won't be necessary, but we are still working on the execution process," said Jody Waugh, a partner at Al Tamimi & Co.
AaAaAaAaAaThe first action taken by any country serious about Islamic finance is usually to remove any tax barriers; for example, the double taxation that can occur on Islamic mortgages when title to the property needs to be transferred twice (first from the seller to the bank, and then from the bank to the eventual owner).