Confused about islamic home financing

Aspect AvKW75
Feb 13 33 Comments

I live in new hampshire and intend to buy a condo for 150k. According to AMJA there are three islamic models they accept as islamic. Only one of those banks finance in new hampshire. The nature of this transaction means two transactions from seller to the bank and from the bank to me. There are other unusual things as prepaid mortgage insurance for the entire loan. This really baloons the closing cost. Obviously the islamic financing is more expensive then traditional interest based loans from big banks.

I have been in the usa for 5 years and have never paid or earned a single cent in interest. I drive used cars, all my investments are in stocks and rented till now and was smart with my finances to avoid interest. I can't decide what to do in this scenario. Do i go thousands in loss to stick to my islamic principles? Wasn't the whole concept of making interest unlawful to relieve financial burden? Is it really islamic if it provides more financial hardship than interest?

Would love it if fellow muslims/jews can share their experience and what they did? Saving up for home while renting is obviously the worst decision financially.

Tc 75k

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TOP 33 Comments
  • Oracle fG3ds
    If it’s burdensome then don’t take it. Simple. Nobody is forcing you to do this.

    FYI I think 🤔 Islamic loan is a scam. It’s the same thing wrapped in religious bullshit.
    Feb 13 2
    • Aspect AvKW75
      OP
      I think they try to mould it according to capatalism but failed. Islamic financing should be more like a partnership venture. The investor should share the risk and the profit. But i guess no investor wants to share risk in a mortgage.
      Feb 13
    • Oracle fG3ds
      Bingo.
      Feb 13
  • Tableau @tableau
    What is this Islamic model? You're allowed to get loans only from those who follow the model? Even if it makes no sense to you financially? 🤯
    Feb 13 9
    • MongoDB / Eng hakanaka
      Buying it for you and selling it to you over time for a higher amount is what they already do in a mortgage (the title is in their name). What you are considering is just a loan with interest by another name.
      Feb 13
    • Tableau @tableau
      Exactly what hakanaka says. If you're really want to avoid interest pay the whole price otherwise it's just another name and eye wash.
      Feb 14
  • Google / Eng Jqu
    Stick to your principles. InshaAllah if you stick to your principles there will be Baraka in the house, and for those who live in it. Not to mention in the long run you will inshaAllah look back favorably on your decision.

    MashaAllah you have managed to live a righteous life for the most part thus far based on your post... Don't waste your previous sacrifices at this time.

    Lastly, remember what the prophet (Saw) said about the one who deals in interest. It is as if he has taken up arms against Allah and his prophet. Think about what that means. When you pray to him, when you're desperate and need something beyond your control, that you will have to ask the One against whom you have taken up arms.
    Feb 13 1
    • Aspect AvKW75
      OP
      Thanks for your reply. It does make sense to make one more sacrifise. Good day to you
      Feb 13
  • Rakuten / Ops
    tooQ10

    Rakuten Ops

    PRE
    Rakuten USA
    BIO
    Obligatory: YoE 20, TC 41k. Such is life for us non-SWE office monkeys!
    tooQ10more
    OP, don't you _receive_ interest on your savings? Or do you refuse to accept that money?
    Feb 13 3
    • Aspect AvKW75
      OP
      I do recieve interest on my HSA but its really small and i'll donate the money
      Feb 14
    • Oracle fG3ds
      People who avoid interest in my circle told me that they don’t invest in stock too. Because these companies take loans too. Their business run on interest.

      On top of that almost all big banks are in index. How do you resolve this conflict?
      Feb 14
  • JPMorgan Chase wQPG76
    Interest isn’t unlawful in the US, welcome

    There’s no way a third party can give you lower cost since they’ll need to pay interest themselves.
    Feb 13 0
  • Oracle ☁️ 9
    Follow up question
    Are you taking the condo to the grave?
    Feb 13 0
  • Amazon djsnfbbd11
    A lot of reasons why interest is unlawful.. but to your point, why not just keep renting?
    Feb 13 3
    • Google vvffii
      Interest is unlawful? What?
      Feb 13
    • Aspect AvKW75
      OP
      Just for muslims and some other religions. Totally legal in usa so relax 😅
      Feb 13
  • Microsoft msft51
    I thought it was only you couldn’t stand to gain interest from others but should be fine borrowing from others. It’s also ironical that there’s a thing that’s Islam loans and the interest is higher than standard commercial loans. Haha 😆

    Can you borrow interest free from your mosque? Why not?
    Feb 13 1
    • Aspect AvKW75
      OP
      I'll look into that. It's highly unlikely they would have such a thing. I mean they are always asking for donations for their new mosque 😆
      Feb 13
  • Amazon / Eng KHCr70
    This sounds like a religious question, not a financial one. Go ask your local imam
    Feb 13 1
    • Aspect AvKW75
      OP
      I agree. Just wanted to learn from people who had a similar experience in the past
      Feb 13
  • Google vvffii
    If you think about it, renting is a type of interest payment, isn't it?
    Feb 13 2
    • Rakuten / Ops
      tooQ10

      Rakuten Ops

      PRE
      Rakuten USA
      BIO
      Obligatory: YoE 20, TC 41k. Such is life for us non-SWE office monkeys!
      tooQ10more
      Renting isn't interest at all. It's paying for a service.
      Feb 14
    • Google vvffii
      You borrow an asset and make regular payments on it till you return the said asset. Looks like interest to me.
      Feb 14

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