Posted by: islamicfinancingnews | September 24, 2014

A few notes on islamic home financing, being self employed and applying for a loan

If you’ve been reading these blogs than you know that islamic home financing is very different than more traditional loans in some ways. For example, islamic mortgage financing is free from riba and otherwise Sharia compliant where other more traditional Western style loans are usually not. Still, there are some parallels that need to be addressed for these two types of loans particularly where self employed people are concerned.ijara 1

Set Of Income
It’s important you’re clear what set of income your application will be judged on. Of course it’s only natural that the self employed want to get as much as possible when it comes to islamic home financing, but they need to understand the while your gross income is always higher, the net portion of what you make is the number that will determine your eligibility for a loan. That’s the number arrived at after all the deductions have been taken out.

Verifiable Income
Keep in mind that lenders will want to see verifiable income as well and that means you should have all the corresponding paperwork for at least two years before you even think about applying for Islamic mortgage financing. A detailed year-to-date profit and loss statement could also be required so lenders can accurately judge the risk for lending you cash.
Why not read more about the home buying process here?

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