What is Murabaha financing

Islamic law, Sharia prohibits the payment of interest. To use a mortgage is the most common form for the purchase of a home for many countries. On a conventional mortgage, the borrower must pay interest. This will avoid the Muslim believer, for the purchase of a home.

A few years ago, only the rich can afford to buy a house. Now established financial institutions change to the place Muslims. Financial products are created. Thus, Muslims can buy ahome.

As in many countries the knowledge and language of the Koran (the Islamic Bible) is missing, Muslim scholars must review the financial products. This is to ensure that financial products are halal (permitted). Muslim scholars also look at the money that is being used by a financial institution. The money must come from approved sources.

There are more Muslims living mostly in a country with different religion. Naturally, financial institutionsSeeing the need to develop the Muslim market. It is as if the sentence in billions.

The Murabaha and Ijara are equivalent to two Mortgage refinancing options that Islamic Sharia law. In English, this means the rate Murabaha finance the purchase contract. Ijara which means lease are in English.

In Murabaha, the borrower will pay twenty percent as down payment. This means that the borrower is a substantial amount of capital in this option. First, the borrower shops for a house as a conventional mortgage.Subsequently, the borrower will pay twenty percent advance. Then, the financial institution purchases the home for the borrower. In return, the borrower sells the home finance institution for a higher price. The higher price is determined by the initial price, duration and deadweight. Finally, the holder of the loan must repay the amount and duration of the contract.

In Ijara, the borrower provides for a suitable home. After finding a suitable home, the borrower negotiates the price ofHomeowners. If the price is constant, the financial institution buys the gain home ownership. Then, the borrower agrees to lease. On the lease, paid by the borrower as well as pay the mortgage.

In any case, the borrowers pay the mortgage without penalty. In fact, Murabaha and Ijara more expensive conventional mortgage. However, I feel the Muslim faithful. Rather than pay more until it is allowed, theirReligion.

Technically, the house is sold, twice. First, the financial institution buys the house. Then, the borrower buys the house from financial institution. It is charged to the borrower, the mortgage refinancing closing costs twice. Recently, mainstream institution borrowing costs only a closure costs for equality.

Muslim communities in many countries is steadily growing. It 'a dream of one day buy a house. However, there are some obstacleswill come their way. And 'natural. Many believers feel guilty, is that conflicts take their religion. Then, you just pay extra. There are no complaints. At first, many fans think that conventional mortgage is the only way to proceed. Times are changing. mainstream financial institutions turn their needs and religion.

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