Posted by: islamicfinancingnews | May 16, 2012

Pre-qualifying begins the Ijara process that leads to Islamic mortgages

When you obtain Islamic finance to purchase your home, it’s important to understand the financial obligations that are an essential part of Islamic mortgages.

Figures recently released by The Canadian Real Estate Association (CREA) reveal home sales in Canada increased 2.5% in March of this year, however, almost 20% of mortgage applications are being turned down by the country’s biggest banks because they don’t meet the qualifications for CMHC insurance.

CMHC manages the country’s housing industry and insures bank approved mortgages. Experts in the industry note that stricter lending rules in 2010 and 2011 increasing the minimum percent a borrower needs for a down payment and decreasing the maximum term of a mortgage have combined to make it harder to quality for a CMHC insured mortgage. This has caused borrowers who don’t fit conventional lending requirements to seek out alternate lending sources.

In addition to having reasonable credit, important requirements for buying a home include having enough money in current accounts to provide a traditional down payment of 10 to 20% or more, with sufficient income to afford the monthly payments, cover closing costs and have funds in reserve. Talk to your lender about Islamic finance options that are available including the ways pre-qualifying a lessee begins the Ijara process.

 

 

 

 

 


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