Posted by: islamicfinancingnews | March 30, 2012

Some methods to help you prepay Islamic mortgages

 You need to understand that while Islamic loans are different from more conventional mortgages in that they do away with riba, there are some more traditional values that will help you to navigate through this form of Islamic finance

It doesn’t matter whether you’re a Muslim or of another denomination, no one wants to owe money to another for longer than they have to and that’s why the ideas behind prepaying a mortgage make for sound financial thinking.

There are several different methods available here and these include:

  • Paying a lump sum all at once. Many people pick the anniversary date when the mortgage comes due to put what they are allowed to down on the outstanding balance. That lessens the amount you owe in one swoop.
  • You can also increase the number of payments that you make within a year. There’s usually some kind of arrangement that’s been made in the contract that allows this.

 

Here’s a misconception around that Islamic mortgages are completely different from their western counterparts but that’s not entirely true. Remember that you need to have a good understanding of the differences and similarities for both to get the right overview.


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