Posted by: islamicfinancingnews | February 26, 2015

Your ijara loan and equity

When you ask around you’ll find there are many different reasons to get an ijara loan. Of course when you’re a Muslim, it’s important that you get an ijara mortgage so that you can stay Sharia compliant. However, there’s lots more to the beneficial aspects of getting one of these products and one of the advantages you’ll notice after several years in your house is a build up of equity. Following are a few reasons this aspect is just as important as the religious overtones of an ijara loan.

  • When you own a place, the equity that you build up comes from the payments that you make toward the mortgage. There’s no such dividend when you rent and you’ll soon notice as house prices go up and the amount that you owe on your ijara mortgage drops, you’ll be in a position to redistribute your wealth into other areas or future real estate deals.
  • Equity also allows you to reinvest in your current place and drive the market value up. Renovations that you pay for with an ijara loan actually increase the asking price that you can get for your home on the market.

An ijara loan has a dual purpose in that you can make more money with the equity you build up while at the same time staying Sharia compliant.


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