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"The program is targeted at low-to-moderate income families. Qualified applicants have to complete first-time home buyer education classes. The goal is to help Muslim home buyers build wealth and reap the benefits of home ownership."
Reading over the requirements, it appears a third party brokers the deal and builds an interest factor into the purchase price. As a result, a $200K property may be some amount more, such as $400K, with the imputed interest built into the price. Since the price includes the interest, this gets around the legal prohibition on paying interest, the payments are just on the price agreed to for the property.
"The program is targeted at low-to-moderate income families. Qualified applicants have to complete first-time home buyer education classes. The goal is to help Muslim home buyers build wealth and reap the benefits of home ownership."
Which is not the same thing as saying they "can't afford mortgages any other way."
The article also points out:
"In its five and a half years offering Islamic lending, Loundy says Devon Bank hasn't lost a penny, though he admits the recession could make that record difficult to sustain as more borrowers face job loss."
Which is not the same thing as saying they "can't afford mortgages any other way."
The article also points out:
"In its five and a half years offering Islamic lending, Loundy says Devon Bank hasn't lost a penny, though he admits the recession could make that record difficult to sustain as more borrowers face job loss."
I never said that Muslims who borrowed on this type of mortgage were deadbeats. You're completely ignoring my actual questions.
Never mind. You're too busy being defensive--looking high and low for signs of discriminatory sentiment in my wording.
If paying interest is against one's religion, shouldn't it be time for that person to consider a new religion?
That’s equally as stupid as Catholics giving up dumb **** like candy, masturbation, and McDonald’s for lent.
I don't get organized religion. You would think a credible religion would focus on things like not molesting children, flying planes into buildings, etc. instead of interest payments.
Reading over the requirements, it appears a third party brokers the deal and builds an interest factor into the purchase price. As a result, a $200K property may be some amount more, such as $400K, with the imputed interest built into the price. Since the price includes the interest, this gets around the legal prohibition on paying interest, the payments are just on the price agreed to for the property.
THANK you. I'm thinking that probably wouldn't work in my neck of the woods, where the housing market is so much more expensive. Except for wealthy applicants, of course.
Basically that number on your amortization schedule for your mortgage (ugh, the dreaded number) that shows what you have paid at the end of the loan, principal and interest combined (again, I hate that #), would be the starting loan amount.
I'm guessing in MN the home prices are much cheaper so it's not as dramatic as it would be say, here in NY.
Many people who have been through a refi will be familiar with the concept of buying down the interest rate by paying more points, then including the points in the refi principal. Haven't investigated this program, but it doesn't sound much different from using points to buy the rate down to 0%, then financing the points. Depending on how the contracts are written, the points might still be tax-deductible...
THANK you. I'm thinking that probably wouldn't work in my neck of the woods, where the housing market is so much more expensive. Except for wealthy applicants, of course.
I could also see a problem in California, where Prop 13 requires property taxes to be based upon purchase price. I also can envision problems concerning annual appraisals.
Many people who have been through a refi will be familiar with the concept of buying down the interest rate by paying more points, then including the points in the refi principal. Haven't investigated this program, but it doesn't sound much different from using points to buy the rate down to 0%, then financing the points. Depending on how the contracts are written, the points might still be tax-deductible...
Hmm, could be like a third party pays the points to bring the interest rate to zero (odd concept but that seems to be how it would work). Conceptually, you would have your payments to the originator for the purchase itself and a third party who paid the points on the mortgage. However, this still would be recognized as interest, so it would appear to violate the spirit (if not the letter) of Islamic law.
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