An Islamic mortgage is an advantageous option for people who want to get interest-free loans. In addition to the interest-free loan options offered by the participating banks, the Islamic mortgage is an alternative that can be used by people who want to own a house without paying loan interest.
What is Islamic Mortgage?
When we look at the Islamic mortgage applications in the world, two methods come to the fore. Murabaha (usuary) mortgage is one of them. It has a very simple logic. After finding the house you like, an application is made to a bank that provides mortgage loans following Islamic methods.
How Does an Islamic Mortgage Work?
The participating bank buys the house after the procedures specified in the law when applying for a mortgage. It then resells to the consumer at a higher price. This higher price is a dividend calculated considering the borrowing term of the person added to the price agreed with the previous owner of the house. It is calculated by reducing the down payment.
What is Halal Home Financing?
First-degree and first-stage mortgage collateral is received for debt. Another mortgage application is the leasing method. This application basically progresses like the Murabaha method. In other words, the house to be purchased is determined and applied to the participating bank. The participating bank purchases the real estate, if deemed appropriate, and makes a purchase contract with the consumer.
The participation bank starts to pay the installments made by calculating the dividend based on the maturity added to the price of the real estate in the payment plan made with the consumer. At the end of the lease agreement, the consumer takes over the ownership of the real estate by making the payment to cover the remaining balance. On the other hand, Turkey Wealth Fund (TWF) Chairman Mehmet Bostan has announced that the subsidiary of the Islamic Development Bank signed an agreement on mortgage development.