Islamic mortgages and some general mortgage tips

Whether you are shopping for a conventional mortgage or one of the Sharia compliant Islamic mortgages that avoid Riba, it’s wise to follow a few general guidelines.

• When you apply for a mortgage, keep in mind the level of your debt will affect the amount of the mortgage you qualify for. In fact, when it comes to mortgage payments, people are generally advised not to spend more than thirty percent of their gross combined family income.
• Make sure to shop for a mortgage that allows prepayment options. Increasing the amount of mortgage payments you are allowed to make, or choosing a shorter amortization period, will help to pay down the principal amount of the mortgage quicker and reduce the interest payments over the term of the mortgage. Having the option of making weekly payments is an even better way of paying off the debt faster.
• Shop around. The best way for lenders to compete when interest rates remain fairly level is to offer customers the best terms and conditions on their products.

All in all, financial experts agree there is a definite financial advantage to making payments on a mortgage rather than paying approximately the same amount of money towards rent on a house or apartment. The quicker you pay down your mortgage, the more equity you will build up in your home and the more money in your pocket when it comes time to sell your home. Talk to an Islamic finance lender for advice on the different types of finance options available to suit your needs and budget.