I was speaking with a realtor of the Muslim faith on Sharia compliant transactions, and he deplored the "Sharia-compliant" programs on offer in USA. He confessed he was not the most devout Muslim himself, but he said people who accept these deals are accepting "pork labelled beef."
I share his desire to see things labelled properly. A most obvious source of confusion in the discussion is calling what mortgage bankers offer "home loans."
Well in Islam and Christianity loans are strictly a charitable act, in which no interest (usury) may be charged, under any circumstances. Both religions are clear and strict on this point.
The idea of a home loan is confused. No bank lends money for a home as a charitable act (and as a matter of fact, banks lend credit, not money, anyway.) So a bank offering a home loan suffers an internal contradiction. Banks do lend money (or credit) for homes as a business proposition.
Now making a loan of money to someone to buy a house, as a charitable act, is applauded in both religions (although the IRS expects to tax someone on imputed usury income). That would be the term "home loan" properly used in both Islam and Christianity.
Now banks do business lending credit at interest (usury), a practice strictly forbidden to this day by both religions.
And both religions approve the business of helping people get into homes. How, if not by lending money (or credit). Well, by a means that goes back to the beginning of mankind. A business deal in which a homeowner sells his house with time payments to two or more people, who form a partnership.
Say Tom has $450,000 he is looking to invest in a business and I have $50,000. Tom already has a house. We agree to pool our money to buy a house together. Now Tom owns 90% of the house, and I own 10%. We agree I will rent out Tom's 90% from him and live in the house.
If further I want to buy the house form Tom, and he is willing to sell, then at any point I buy him out, or but up his portion over time. As long as "interest"is not built into any of the payments, this business deal is quite acceptable in both religions.
So home ownership, the process of acquiring a home, ought to be looked at as a business deal, not a loan (unless of course someone is simply gifting you a house, or lending you money to buy it, with no interest on the repayment, as an act of charity.)
Please feel free to share this post with three of your friends.
I share his desire to see things labelled properly. A most obvious source of confusion in the discussion is calling what mortgage bankers offer "home loans."
Well in Islam and Christianity loans are strictly a charitable act, in which no interest (usury) may be charged, under any circumstances. Both religions are clear and strict on this point.
The idea of a home loan is confused. No bank lends money for a home as a charitable act (and as a matter of fact, banks lend credit, not money, anyway.) So a bank offering a home loan suffers an internal contradiction. Banks do lend money (or credit) for homes as a business proposition.
Now making a loan of money to someone to buy a house, as a charitable act, is applauded in both religions (although the IRS expects to tax someone on imputed usury income). That would be the term "home loan" properly used in both Islam and Christianity.
Now banks do business lending credit at interest (usury), a practice strictly forbidden to this day by both religions.
And both religions approve the business of helping people get into homes. How, if not by lending money (or credit). Well, by a means that goes back to the beginning of mankind. A business deal in which a homeowner sells his house with time payments to two or more people, who form a partnership.
Say Tom has $450,000 he is looking to invest in a business and I have $50,000. Tom already has a house. We agree to pool our money to buy a house together. Now Tom owns 90% of the house, and I own 10%. We agree I will rent out Tom's 90% from him and live in the house.
If further I want to buy the house form Tom, and he is willing to sell, then at any point I buy him out, or but up his portion over time. As long as "interest"is not built into any of the payments, this business deal is quite acceptable in both religions.
So home ownership, the process of acquiring a home, ought to be looked at as a business deal, not a loan (unless of course someone is simply gifting you a house, or lending you money to buy it, with no interest on the repayment, as an act of charity.)
Please feel free to share this post with three of your friends.
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