Question:-
Why aren’t we allowed to buy a house through a bank, the Shariah way?
You tell them the house you want, and they will tell you what the repayment will be.
For e.g. the house value is R1 000 000 and the repayment is R1 200 000. The R200 000, they say, is their profit.
Answer:-
If the bank purchases the houses directly from the seller, then takes possession of the title deeds and keys (indicating that they have taken ownership), and thereafter sells it to you at a profit, then it will be correct. When selling it to you, the monthly installment amounts must be stipulated, as well as the total period of time over which the amount must be settled (such as R5000 over 60 months.)
Also, if you default in payment, then you cannot be penalized as any penalty for late payment is considered as interest. The bank cannot compel you to insure the property, as insurance is Haraam.
If the house is financed in the manner explained above, then the transaction will be in order with the proviso that, there aren’t any other impermissible clauses in the finance contract.
ALLAH TA’ALA KNOWS BEST!
ANSWERED BY:
Mufti Mohammed Desai
Date: 12 Ramadaan 1443 / 14 April 2022
