Manitoba credit union 1st to offer Islamic mortgages

[karachiwala]

http://ca.news.finance.yahoo.com/s/...credit-union-1st-offer-islamic-mortgages.html Man. credit union 1st to offer Islamic mortgages

Wed May 5, 9:06 PM


A Manitoba credit union has become the first major financial institution in Canada to offer mortgages geared towards the needs of devout Muslims.
On Wednesday, Winnipeg-based Assiniboine Credit Union (ACU) announced it was launching an Islamic Mortgage Program.
Currently, the majority of the Winnipeg's roughly 13,000 Muslims rent or don't own the homes they live in, the credit union said.
For-profit loans are problematic for people of the faith because the Qur'an forbids the payment of interest.
Under the program, the credit union and the homebuyer enter into what ACU calls a "declining partnership agreement." Both parties co-own the home and its title.
"During this time, the family has exclusive rights to live in the home and in exchange they agree to pay ACU a profit. At the end of the contract the Muslim family is the sole owner of the home," the credit union said in a press release.
The would-be homeowner must contribute a minimum of 20 per cent of the home's price at the start of the agreement, ACU said.
The plan was developed with the help of Islamic religious scholars in Canada and the U.S., the credit union added.

 

[gazoomartian]

http://ca.news.finance.yahoo.com/s/...credit-union-1st-offer-islamic-mortgages.html Man. credit union 1st to offer Islamic mortgages

Wed May 5, 9:06 PM


A Manitoba credit union has become the first major financial institution in Canada to offer mortgages geared towards the needs of devout Muslims.
On Wednesday, Winnipeg-based Assiniboine Credit Union (ACU) announced it was launching an Islamic Mortgage Program.
Currently, the majority of the Winnipeg's roughly 13,000 Muslims rent or don't own the homes they live in, the credit union said.
For-profit loans are problematic for people of the faith because the Qur'an forbids the payment of interest.
Under the program, the credit union and the homebuyer enter into what ACU calls a "declining partnership agreement." Both parties co-own the home and its title.
"During this time, the family has exclusive rights to live in the home and in exchange they agree to pay ACU a profit. At the end of the contract the Muslim family is the sole owner of the home," the credit union said in a press release.
The would-be homeowner must contribute a minimum of 20 per cent of the home's price at the start of the agreement, ACU said.
The plan was developed with the help of Islamic religious scholars in Canada and the U.S., the credit union added.

Alhamdulillah takbeeer allahu akbar

Inshallah this will catch on and non-muslims will take advantage and dump the conventional mortgage system. Mortgagor banks will see the ACU business grow and will adopt the same system. And slowly the mortgagees will start accepting Islam. Who knows as the time goes, the entire north american will turn muslim. Ameen

 

[Knowledge Seeker]

Jazak Allah brother for sharing valuable information.

It is a pleasure to know that Muslims are getting options in financial system of Canada to avoid interest based mortgages.

 

[MKR_KAS]

this might be a good option for muslims in canada but every one should research how a muslim mortgage company is operating. some are really fraud.

- the supply of money for "credit unions" or "islamic companies" should not come from other money providing institutions that deal with interest. the souce should also be riba free in addition to offerings.
we have to see that both ends of an islamic mortgage company are riba free. if they take money from other institutions to provide interest free loans to mulims and after recieving rent from muslims pay back interest to the lending institutions then it is not RIBA-FREE.

2- i have seen some companies in Canada link "UM Financial" and "Ijara Loans" which do not operate on correct principle. They take interest based money from banks/credit unions and then through their company they lend it to muslims. (adding their profit + admin fee's) after this they collect rent (which is very high and un-justifiable) from muslims and pay back interest to lending institutions.

3- ISNA (Islamic Society of North America) operates on correct principle but they have some limitations and rent is very high. they do not take money from other companies who operate on Interest infact its muslims that have been investing for many years.
4- Pharos Mortgage another Islamic Mortage Company in Ontario will also not disclose thier souce of money. their RENT rates are more competitive then ISNA.

just a little research i have some.

Jazakallah.

-MKR_KAS.

 

[msmirza007]

brothers you donot know its worst than conventional mortgage., i live in ontario,canada

 

[rahat]

I have certsin observations on the mortagage companies and their operative system. Its basic prinicipal is to get capital and invest to get profit. It is a kind of "interest", where there is no possibility of loss.
Quran clearly asked to stay away from the intrest system and termed it worst evil. Now in all over the world the prevailing system is based on "interest based economy". So the intrest free system can only be applicable in a society where the economical system is "interest free", otherwise anything which we will contribute will be used to strenthen the prevailing intrest based system.

Allah asked to give away your wealth which is access to your need in the name of Allah. therefore, its mean if the society has some wealthy peoples and they are "real believers", they mmust give away their wealth to the peoples who need it, in such a your left hand ill not even know what and whom you have assisted with your right hand.

May Allah give us the courage and strenth to understand implement quran in our lives (Ameen).

 

[Raaz]

Alhamdulillah takbeeer allahu akbar

Inshallah this will catch on and non-muslims will take advantage and dump the conventional mortgage system. Mortgagor banks will see the ACU business grow and will adopt the same system. And slowly the mortgagees will start accepting Islam. Who knows as the time goes, the entire north american will turn muslim. Ameen

In Manitoba there are lots of Mennonites. They also do not like interest. They do not eat pork and alcohol also.

So this mortgage will help them too.

 

[Raaz]

this might be a good option for muslims in canada but every one should research how a muslim mortgage company is operating. some are really fraud.

- the supply of money for "credit unions" or "islamic companies" should not come from other money providing institutions that deal with interest. the souce should also be riba free in addition to offerings.
we have to see that both ends of an islamic mortgage company are riba free. if they take money from other institutions to provide interest free loans to mulims and after recieving rent from muslims pay back interest to the lending institutions then it is not RIBA-FREE.

2- i have seen some companies in Canada link "UM Financial" and "Ijara Loans" which do not operate on correct principle. They take interest based money from banks/credit unions and then through their company they lend it to muslims. (adding their profit + admin fee's) after this they collect rent (which is very high and un-justifiable) from muslims and pay back interest to lending institutions.

3- ISNA (Islamic Society of North America) operates on correct principle but they have some limitations and rent is very high. they do not take money from other companies who operate on Interest infact its muslims that have been investing for many years.
4- Pharos Mortgage another Islamic Mortage Company in Ontario will also not disclose thier souce of money. their RENT rates are more competitive then ISNA.

just a little research i have some.

Jazakallah.

-MKR_KAS.

brothers you donot know its worst than conventional mortgage., i live in ontario,canada

I agree with u ....basically u r right.

Right now every thing is based on interest. It may have different different names but basically policy is same ....

Actually , muslim scholars has to study again the term 'Riba'.
And How someone can get money ,easily and comfortable conditions. Because everyone need money for study, business or mortgage.

 

[gazoomartian]

I agree with u ....basically u r right.

Right now every thing is based on interest. It may have different different names but basically policy is same ....

Actually , muslim scholars has to study again the term 'Riba'.
And How someone can get money ,easily and comfortable conditions. Because everyone need money for study, business or mortgage.

I have come up with a new terminology for riba. the word 'usuary' gives wrong connotation, therefore the term that I use is "MONEY RENTAL' since in fact it is a rental operation. I am only talking about conventional mortage and interest.

For example, you have a mortgage of $100,000 at 12% and you pay roughly, say, $1200 in mortgage. Out of that only perhaps $200 goes into the principle, if that. So you are renting the gradually reducing principle of $100,000 and paying $1000 as rent and $200 as principle. This 'rent' ($1000) is what is riba which is forbidden and has been equated as deserving of war from Allah and His rasul (s.a.w.) (harb-im-minallah wa rasule-hi

Does anybody disagree with this explanation?

 

[Raaz]

Thats good explanation . I agree...

The difference in principal and interest, $200 & $1000 is because of Compound interest.

So tell us how we can borrow money easily, if we need.? thanks.

 

[rahat]

The term"riba" is explained in Quran and hadith very clearly. Nowadays the whole economyical system is based on "Riba".Whatever name you can give it, but it is actually Riba.
We must refraain from it. otherwise it will be disobeying Quran. The system Quran suggest to provide basic need to each one by the state and the peoples are discourage to own more then their need. In that case it ask the "believers" to give away whatever you have more then your need. The need is also well defined for the "Momeneen". However, if we are not upto mark to that level of Momeenen" then qyran ask to give the money as loan to the needed one and write down it. But prohibit to get any proift or avantage from that money. It further said if you can give it away to the lender without any demand of return, it will be beneficial for you.