Posted by: islamicfinancingnews | May 23, 2012

Adequate reserve funds help strengthen Islamic mortgages

When you want to buy a home, having adequate funds in reserve is one of the requirements you need to qualify for the Islamic mortgages to help you get started. In addition to providing a traditional down payment of 10 to 20 percent or higher and proving you are responsible with credit, this type of emergency fund acts as a safeguard in the event your job or health are jeopardized and you need access to funds quickly.

While some people think they can depend on a credit card or a lower interest line of credit to cope with a financial crisis, keep in mind that counting on credit to meet emergencies means dealing with interest rates and monthly payments. Your own reserve fund allows you to deal with an emergency situation without adding to your debt load. Although the monies in a reserve fund will eventually be depleted, not having to rely upon other types of credit will leave you free from debt.

Understanding Islamic finance including Islamic mortgages will help you to find the right home and ensure the spiritual well being of your family. Having your own cash funds in reserve gives you the security that comes with meeting life’s financial difficulties on your terms.

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