Posted by: islamicfinancingnews | February 12, 2014

How islamic home loans work

There are Muslims and people of other faiths interested in islamic home loans but they need to have more information to make an informed choice. These folks understand that islamic loans usa are a great way to have an transparent and honest relationship with a lender that doesn’t involve riba but they need a few more details before they sign on the dotted line.

Here’s a quick overview of these ijara loans.

First a trust is created. Then a lease to own agreement is set up between you as the customer and the trust. When you pay rent to the trust each month, mortgages #2these payments avoid the kind of interest that’s contrary to Sharia compliance. Part of the rent goes to profit and the rest goes to ownership until you have ownership of the property.

Remember, these islamic home loans are not exclusive to Muslims. More and more, they are becoming a viable alternative to traditional western financing.

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