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 ?
The rules were amended to enable banks that sell Islamic mortgages to purchase a Government guarantee for them.
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.
Home Purchase Plans (HPPs) are a Sharia law compliant alternative to mortgages and are often known as Islamic Mortgages .
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.
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.
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.
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).
Apart from the core issues being discussed, which include global trends in Islamic banking, capitalizing on opportunities due to the meltdown, Islamic mortgages and retail asset management, the most talked about session of the event along with the Panel will be the 'International Open Fatwa Session in Islamic Retail Banking' which will feature the leading Shariah Scholars from around the world on one stage debating on interpretations for major products.
Dubai: Islamic mortgages are becoming increasingly popular among non-Muslims.