Documentation tips

It’s important to remember that getting an Islamic loan is about making sure that you stay away from riba. Other than that, this kind of Islamic financing is a lot like a traditional western mortgage in that you still need proper documentation to apply and get the money for the property you’re interested in.

In short, you need to prove to the bank or other financial institution that you’re a good risk for paying back the money that you want to borrow and there are a few things most of these places will want to see.

At the top of the list is proof of your income including two years of W2s, 1099s and 1098s as well as a recent pay stub covering the last month of your most recent job.  Self employed people also need to produce two years worth of tax returns to prove that your business is solid enough to warrant the loan.

You’ll also need to provide addresses where you’ve lived for the last two years and a list of employers dating back that far. The application process will also need to see a list of all your debts including any other loans that you’ve got. Picture ID is often required for all borrowers.

You’ll need the same two years’ worth of tax returns if you own a rental property as well and you’ll also need to provide a copy of the Rental Agreement.

Being thorough helps to speed the process up and supplying statements that go back three months for bank, mutual funds and stock accounts is also a great idea. Remember that getting any kind of Islamic finance is all about watching out for riba but you still need to have the right documentation for a traditional residential mortgage.  Learn more about the whole process here.

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