Posted by: islamicfinancingnews | April 9, 2013

Understanding the basics of Islamic mortgages

islam-11 It’s important for practicing Muslims of all ages to understand the basics of Islamic mortgages including the fact that some Canadians are taking longer to pay off a mortgage. Participants in the latest CIBC/Leger Marketing poll don’t expect to be mortgage free until the age of 57, two years later than respondents reported in a similar survey conducted in 2012.

Results from the online survey reveal that only eleven percent of people who are carrying non-mortgage debt after buying a home made extra payments on their mortgage, compared to nineteen percent of people who did not add on any extra non-mortgage consumer debt. Home prices, interest rates, income growth and spending and saving habits were some of the factors determining average mortgage payoff time. Add to that the fact that fifty percent of respondents surveyed report adding non-mortgage consumer debt after purchasing their last home. In many cases, debt accumulation can affect a person’s abiity to make mortgage prepayments and significantly extend a mortgagor’s amortization. Whether debt accumulation is necessary or avoidable, carrying a mortgage into retirement years could present problems for people with decreased earning potential.

Talk to your lender who can provide you with the information you need to make better choices about the different Islamic financing available including loans free from Riba to help fund your retirement years.

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