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here from your link. So they basicaly pay it up front by a different name.
Quote:
Here's how the mortgage, known as Murabaha financing or "cost plus sale," works:
The state buys a home and resells it to the buyer at a higher price. The down payment and monthly installments are agreed to up front at current mortgage rates. The deal is identical to a thirty-year fixed-rate loan, except there's no additional interest, because the higher up front price factors in payments that would have been made over the life of a traditional mortgage.
A handful of private banks and lending institutions offer Islamic mortgages in the U.S., but Minnesota Housing is the first state agency to offer such a product. The program is the brainchild of Hussein Samatar, director of the African Development Center in Minneapolis.
"The process is different, but the outcome will look the same," Samatar says. "We wanted to be as conventional as possible, while respecting the tenets of Islam."
I'm sorry, but I think this is ridiculous. We're now supposed to offer mortgage terms tailor-made to accommodate differing religious laws? This is not a Muslim country. Muslims who move here have either got to assimilate or move elsewhere. First, Muslim women in Florida want driver's license photos with their faces covered, and now this? What is it with this new wave of immigrants? Does this mean an Orthodox Jew, who accepts a job offer that includes a Friday evening or Saturday work schedule, can now turn around and sue the employer for making him work on Friday evening or Saturday? Enough is enough.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
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Another way that it can be done is that they just "add" the interest to the amount loaned. So if the house is $100,000 and the total pay back is $240,000, they just write the loan for $240,000 with zero interest. Of course the Muslim loses a big tax deduction.
In the story the OP was referring to, the buyers agree to pay more than what the house is worth. It's just fudging the numbers so that technically "no interest" is paid. In the California case, it's a "lease-to-own." It just seems like semantics to save face in the eyes of their religion.
Exactly. As I said, it's just changing the name if the "interest paid" to something else, to fool the ignorant into thinking they aren't paying "interest".
If they're happy, and the lender is happy, then what's the problem?
This is not a Muslim country. Muslims who move here have either got to assimilate or move elsewhere.
This is not a Christian or Jewish or Buddhist country either. But all faiths are welcome. This is America.
If all of our ancestors had to assimilate to the people that were there previously, we'd all have names like "Red Corn," or "Big Bear," only it would be in a native-american language that has probably been lost.
The U.S. is a melting pot of many cultures. Accept it and move on.
I'm sorry, but I think this is ridiculous. We're now supposed to offer mortgage terms tailor-made to accommodate differing religious laws? This is not a Muslim country. Muslims who move here have either got to assimilate or move elsewhere. First, Muslim women in Florida want driver's license photos with their faces covered, and now this? What is it with this new wave of immigrants? Does this mean an Orthodox Jew, who accepts a job offer that includes a Friday evening or Saturday work schedule, can now turn around and sue the employer for making him work on Friday evening or Saturday? Enough is enough.
We? Who is 'we'? You statement would only apply if 'we' is a bank. The banks will do anything to get paying customers. I'd say a private bank can do whatever they want to attract customers as long as they assume the risk.
'You', or 'we' don't have to do anything.
Yes, Jews have their own laws. They can settle their disputes in Jewish court. Who cares? It has nothing to do with you, so what do you care?
If all of our ancestors had to assimilate to the people that were there previously, we'd all have names like "Red Corn," or "Big Bear," only it would be in a native-american language that has probably been lost.
The U.S. is a melting pot of many cultures. Accept it and move on.
Exactly. The U.S. is a melting pot of many cultures--all assimilated into "American" SECULAR culture. That means that immigrant groups cannot ask for special privileges based on their cultural/religious beliefs.
I'm sorry, but I think this is ridiculous. We're now supposed to offer mortgage terms tailor-made to accommodate differing religious laws? This is not a Muslim country. Muslims who move here have either got to assimilate or move elsewhere. First, Muslim women in Florida want driver's license photos with their faces covered, and now this? What is it with this new wave of immigrants? Does this mean an Orthodox Jew, who accepts a job offer that includes a Friday evening or Saturday work schedule, can now turn around and sue the employer for making him work on Friday evening or Saturday? Enough is enough.
If there is a market for these types of mortgages, people will offer the product. It's simply a loan that's structured differently.
Exactly. As I said, it's just changing the name if the "interest paid" to something else, to fool the ignorant into thinking they aren't paying "interest".
If they're happy, and the lender is happy, then what's the problem?
Yes! The more qualified people that can actually purchase homes in this market, the better for everybody. It's how home prices will stabilize. If they can qualify for loans in this credit crunch, more power to 'em!
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