Islamic banking or mortgage

[Avalanche]

Ma waalatay

The plan is to build enough properties so that the rent from back home pays for the rent in the west.

Landlordism is evilness. That would go against my morals.

 

[SixthAbdi]

But if we as Muslims cannot buy a house wouldn't that put us in a disadvantage compared to the rest of the society? So I understand the Islamic bank do have a profit margin for lending the customers money to buy a house or an apartment..

Yes, Somalis have some of the lowest home ownership rates in the US at >10%
To put that in perspective African Americans have a home ownership rate of ~44% despite being systematically discriminated from purchasing homes until the 1968 Fair Housing Act.
It's actually so over

 

[SixthAbdi]

Yes, Somalis have some of the lowest home ownership rates in the US at >10%
To put that in perspective African Americans have a home ownership rate of ~44% despite being systematically discriminated from purchasing homes until the 1968 Fair Housing Act.
It's actually so over

Btw other Muslim groups purchase homes with or without riba mortgages above the average rate

 

[Abdisamad]

Btw other Muslim groups purchase homes with or without riba mortgages above the average rate

Here where I live there are zero Islamic banks so usually Muslims buy houses through non Muslim banks.

 

[Abdisamad]

Landlordism is evilness. That would go against my morals.

But you will probably pay a landlord to rent if you are not a home owner.

 

[Abdisamad]

I found this website which explains by applying the law of necessity it is permissible to take a loan to buy a house..

Islamic Mortgages .co.uk: Buying Houses with mortgages: Ruling European Council for Fatwa and Research

Islamic Mortgages .co.uk is the leading resource for all Muslims looking for Halal finance solutions. We provide a comprehensive resource of all Shariah Law compliant mortgage products available within the UK.

www.islamicmortgages.co.uk

 

[Avalanche]

But you will probably pay a landlord to rent if you are not a home owner.

Yeah, I know

 

[queasyian]

this is a big elephant in the room, many Muslims have their own homes, and I'm sure 90% do no have the funds to casually pay half a million for a home, so are folks doing mortages or what?

 

[Abdisamad]

this is a big elephant in the room, many Muslims have their own homes, and I'm sure 90% do no have the funds to casually pay half a million for a home, so are folks doing mortages or what?

Yes many have mortgages, you can't save up millions with a regular salary.

 

[Gacmeey]

Landlordism is evilness. That would go against my morals.

Ma adi baa evil ka dhigtay?? Wax la layaabo baa mantay sheegatay? Landlordism is halal and Allah has made it halal.

 

[Gacmeey]

this is a big elephant in the room, many Muslims have their own homes, and I'm sure 90% do no have the funds to casually pay half a million for a home, so are folks doing mortages or what?

Yes many of their houses are acquired through mortgage. Many people feed their families haram then wonder why there is no barakah in it.

 

[Avalanche]

Ma adi baa evil ka dhigtay?? Wax la layaabo baa mantay sheegatay? Landlordism is halal and Allah has made it halal.

 

[Maintainnnin]

I have first-hand experience with this topic, as my family, as well as some of my extended family, have purchased homes through a mortgage here in Minnesota. The option my family chose was through a halal mortgage company known as Guidance Residential. They essentially purchase the house with you from the seller at market rate, making you co-owners of the property. You then pay them rent, which is equivalent to what they would have earned in interest through a traditional mortgage. The rest of your payment goes toward building equity.

This approach is much better than the alternative some people suggest of purchasing a house at an artificially inflated value. Predicting house values 30 years into the future is difficult and heavily dependent on location. If you live in a desirable metro area with strong economic fundamentals, your house will likely appreciate in value. However, if you live in a declining metro area—where jobs are leaving, residents are moving away, and industries are shutting down—your house may depreciate significantly or even become nearly worthless.

Even in an excellent metro area, like the Twin Cities in my example, the specific neighborhood matters. If you live in a shithole area, such as North Minneapolis, your home may barely appreciate in value and might not even keep up with inflation. This could be a major L for you if you lack this understanding and just buy anything.

Additionally, this method protects the lender in case of foreclosure. Since they purchased the house with you at market price rather than at some random inflated value, the mortgage company reduces it's level of risk. If you go through a financial rough spot and have to foreclose, the lender's loss is limited to the actual market value of the house, not some artificially inflated one.


The reason my family chose this route is that we essentially had no choice. Back in 2016, we were Public Housing residents but were evicted because my siblings and I kept putting holes in the walls. It wasn’t even really our fault—the house was built in an incredibly poor manner. I even remember one time when one of my aunts visited and fell through the wall after leaning against it while talking to my mom.

Alhamdulillah, we were able to move in with our uncle while his family was in Africa, and my family took that opportunity to save up for a down payment. He also owned his house btw, which is what gave us the idea to buy our own house. Eight months later, we purchased our home in Richfield for $234,000. It's now worth $400,000, and its market rent is $2,600 as a 4-bedroom, 2-bathroom house. Our mortgage has basically stayed the same at $1,400 a month.

This is how you move ahead financially in America. If we were renting, we’d be paying $1,200 more per month for the same house. We now have just over $100,000 left on our mortgage, which we plan to pay off in the next couple of years inshallah, now that my siblings and I are working.

My immigrant parents, with no formal education here, now own a $400,000 house. They could retire, move to Somalia, and live off its rental income in a few years if they wanted to. This was the best decision we made as a family. If any of you are considering it, I can confidently say the positives far outweigh the negatives.

Lowkey wrote an essay here but hopefully it answers any questions you guys might have.

 

[AlteKartel]

I have first-hand experience with this topic, as my family, as well as some of my extended family, have purchased homes through a mortgage here in Minnesota. The option my family chose was through a halal mortgage company known as Guidance Residential. They essentially purchase the house with you from the seller at market rate, making you co-owners of the property. You then pay them rent, which is equivalent to what they would have earned in interest through a traditional mortgage. The rest of your payment goes toward building equity.

This approach is much better than the alternative some people suggest of purchasing a house at an artificially inflated value. Predicting house values 30 years into the future is difficult and heavily dependent on location. If you live in a desirable metro area with strong economic fundamentals, your house will likely appreciate in value. However, if you live in a declining metro area—where jobs are leaving, residents are moving away, and industries are shutting down—your house may depreciate significantly or even become nearly worthless.

Even in an excellent metro area, like the Twin Cities in my example, the specific neighborhood matters. If you live in a shithole area, such as North Minneapolis, your home may barely appreciate in value and might not even keep up with inflation. This could be a major L for you if you lack this understanding and just buy anything.

Additionally, this method protects the lender in case of foreclosure. Since they purchased the house with you at market price rather than at some random inflated value, the mortgage company reduces it's level of risk. If you go through a financial rough spot and have to foreclose, the lender's loss is limited to the actual market value of the house, not some artificially inflated one.


The reason my family chose this route is that we essentially had no choice. Back in 2016, we were Public Housing residents but were evicted because my siblings and I kept putting holes in the walls. It wasn’t even really our fault—the house was built in an incredibly poor manner. I even remember one time when one of my aunts visited and fell through the wall after leaning against it while talking to my mom.

Alhamdulillah, we were able to move in with our uncle while his family was in Africa, and my family took that opportunity to save up for a down payment. He also owned his house btw, which is what gave us the idea to buy our own house. Eight months later, we purchased our home in Richfield for $234,000. It's now worth $400,000, and its market rent is $2,600 as a 4-bedroom, 2-bathroom house. Our mortgage has basically stayed the same at $1,400 a month.

This is how you move ahead financially in America. If we were renting, we’d be paying $1,200 more per month for the same house. We now have just over $100,000 left on our mortgage, which we plan to pay off in the next couple of years inshallah, now that my siblings and I are working.

My immigrant parents, with no formal education here, now own a $400,000 house. They could retire, move to Somalia, and live off its rental income in a few years if they wanted to. This was the best decision we made as a family. If any of you are considering it, I can confidently say the positives far outweigh the negatives.

Lowkey wrote an essay here but hopefully it answers any questions you guys might have.

Yep. If there is an Islamic banking option that has reputable scholars backing them you should go for it, especially if it is your first house. The sad reality is that having a house is essential in the west if you want to have stability in old age. You cannot rely on your children to support you lol 2nd gen waa qasaaro.

 

[TheLand]

Knew you sounded like a radical leftist.

 

[Angelina]

Thanks for your input walaal.. This also why it didn't make sense why this is considered halal.

I mean it kinda does, Im just questioning how ethical the huge mark up is but if I was to start a business and buy stuff from China, obviously I’d mark up the price to generate profit, hence the concept is similar in Islamic mortgages.

 

[Avalanche]

Knew you sounded like a radical leftist.

I was joking sxb, I was bored

 

[Abdisamad]

I was joking sxb, I was bored

This is a serious thread sxb.. We only need valid input no jokes.. Think this will affect many generations of Somali diaspora to come since we are more or less being excluded from the socioeconomic system in our respective diaspora countries.

 

[Avalanche]

This is a serious thread sxb.. We only need valid input no jokes.. Think this will affect many generations of Somali diaspora to come since we are more or less being excluded from the socioeconomic system in our respective diaspora countries.

To be honest. I think most people will fall for riba eventually. Even though it’s very haram. It goes to a certain point where it is inevitable