What You Need To Know About Islamic Home Loans Before Applying
Purchasing a home is a good investment on your future and an exciting milestone in life. That said, it can also be an intimidating process, especially if you’re buying your first home. Other than finding the perfect home, you will also need to consider the financial aspects involved. Islam does not allow interest to be charged on loans, which is why individuals living by Islamic principles can avail of specialized finance products, like Islamic home loans. Read on to learn more about what you should know about Islamic home loans before applying.
About Islamic Home Loans
Islamic home loans are offered by Islamic home loans financial institutions, which are not permitted to charge interest. This is done according to Islamic law to protect people from exploitation and help build financially healthy societies, making it an ethical and equitable solution for those looking to meet their financing needs. This type of loan is not limited to followers of just one faith but appeals to everyone of all religions and beliefs, Muslim or non-Muslim.
Features of Islamic Home Loans
For loans to be considered halal, or adhering to Islamic law, they must have specific features. For starters, the money used for loan funding need to be obtained from compliant sources, including Islamic and ethical investment funds. The loans should also be extended only to applicants engaging in Islamic-compliant activities. It should not be used for socially harmful activities like casinos, brothels, or breweries. Finally, the loan transaction needs to be conducted fairly, with transparency between both the financier and the borrower.
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Islamic Home Loan Requirements
The requirements to apply for Islamic home loans are similar to that of a traditional one. Applicants will have to submit an application form and provide substantiation of their income to prove their borrowing capacity, as well as to provide proof of their deposit. The loan assessment process will also consider the applicant’s credit history, employment, dependents, expenses, liabilities, property details, and other relevant information.
If you are interested in applying for an Islamic home loan in Finance, consider us at Devon Islamic Finance, where we offer Islamic home loans, as well as other reliable financial services such as commercial finance, refinancing, wealth management, and more. Call us today to get in touch with our knowledgeable specialists and to learn more about our halal Islamic financing and home loans.