Posted by: islamicfinancingnews | January 31, 2014

Looking to offset mortgage rate hikes? Follow these simple tips

You’ve got one eye on staying Sharia compliant and that means looking at Islamic finance. On the other hand, you know it’s necessary to watch what goes on in the market and especially the changes in interest rates. While most mortgage experts are predicting a rise in rates before the end of this year, there are a few things the average person shopping for a home can do to offset the effects on the amount you’ll pay and still stay clear of riba.

  • Make a larger down payment. The more you have to put down on a home, the less you’ll owe. With a smaller mortgage, the monthly payments save moneydecrease and, at a certain point, there’s no need for mortgage insurance.
  • Bump up your plans. If you’ve already been seriously thinking about buying a home, pulling the trigger on a purchase might be better done sooner than later in the year before the rates go up.
  • Rent for a bit longer. Staying in that apartment awhile longer might just be the thing to do to put yourself in a better position to buy. That move could give you the time needed to save a bigger down payment.

Although interest payments don’t concern those looking at Islamic mortgages, rising rates can affect the amount you’ll pay overall.

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