Posted by: islamicfinancingnews | July 18, 2012

Homeowners need to be prepared to meet expenses beyond Islamic mortgages

With current interest rates at record lows, you may be thinking that now is the time to take the plunge into the real estate market. If so, it’s a good idea to sit down and look closely at your savings to figure out how much of a down payment you can afford before you begin to search for a family home. Providing an adequate down payment in the 10% to 20% range or higher, together with a good credit score and a healthy reserve fund will prove to your lender you are serious about obtaining the right Islamic mortgages with the best rates and terms available.

Being prepared goes hand in hand with home ownership. You have to be prepared to do regular maintenance and make minor repairs to your home and you need to be prepared to establish a reserve fund to cover major home repairs or other financial emergencies that could occur. It is recommended that you put aside 5% of your regular pay each month and a savings account is often the best place to watch these funds grow so that money is immediately available when you need it to cover an unexpected expense or emergency.

Building a reserve fund will allow you to meet a financial emergency without reverting to a credit card or other type of high interest loan which only adds to your debt load. Talk to your lender about the different types of Islamic finance that can help you deal with your financial obligations.

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