Posted by: islamicfinancingnews | June 5, 2015

Accurate appraisals are important for the homes you buy and sell with sharia loans.

Even though people who buy homes with sharia loans might think that market value is a fair way to assess the price of the property, all we need to do is look back at some recent history to find out why that’s not all you need to know.

While accurate appraisals are important, it can be dangerous when the market over values the price of a house because the fundamentals get skewered as they did back in 2008. When the fundamentals go wrong in this way, lenders base the maximum mortgage on the appraised value not the price paid which could be much higher. This leaves people buying homes with sharia loans in the position whereby they need to make up the difference which can be a substantial amount of money.

It’s important to find the right professionals when you’re looking for sharia loans that are compliant with sharia rules and getting references from any appraisal company is a good idea to make sure they are credible.

Buying and selling with sharia loans is a different process in some ways and in others much more compatible with the Western traditional mortgage.

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