Posted by: islamicfinancingnews | March 28, 2012

Islamic mortgages: Here’s a few terms to help you along

When you first start looking at all that Islamic finance can do for you, you’ll soon see there are some similarities between more traditional varieties and what Islamic mortgages can do for you. That said, it’s a good idea for you to understand some of the terms that are used.

For example, a closed mortgage is one where the lender is not financially obligated to accept any prepayments. That’s often an option that people like to have whether they have a traditional arrangement or one of the Islamic loans that are getting more and more popular today.

Choosing the right options means selecting what the right mortgage is all about and that often means you need to understand some complex terms and ideas. For example, a prepayment privilege will allow you to pay down the amount you owe quicker but you also need to consider the payment penalty.

Getting what you can from the mortgages that you’re looking at means knowing something about both the traditional and Islamic mortgages that are available today. It’s best to have a balanced view and to have the right information at your disposal so that you can avoid riba while at the same time get the best deal possible.

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