Can a nice person explain how this style of banking works in regards to the lending for real estate? Any links as well would be good.
Thanks for any help in regards to this style of institution.
We are all made from Stars
You may want to search for Shariah (from memory) mortgages. No interest is allowed to be charged so compliant loans can have a shared equity type arrangement
There is also a variation where the interest is capitialised for 25 years to create a larger principal amount, which is then paid off in equal payments….the increased payements are then considered to be all principal.
As we have seen there is no way a true interest free home loan is possible…I think the phrase ASIC like to use is “Pie in the Sky”
rgds
NatThere are a few companies in Sydney offering Islamic loans. I have written a post here explaining it about 2 years ago. Ican’t now remember how it works, but it was like a lease option where the clients are paying rent to the lender. It works out ot be exactly the same as paying X% in interest and these companies are even required to have comparision interest rates – even tho no ‘interest’ is charged.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Wasn’t there a bank looking at doing something similair ?
Decreased intrest payments for a share in the increased equity ?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorNat R,
Well you might have your opportunity soon Nat R. Docs are apparently to be available from 18th April so you can tear them to pieces then to reinforce your point.
Or…..if your are wrong…?
Cheers skippygirl
Skippygirl
I will (not) believe it when I (don’t) see it.
History is on my side !
Keep in mind that the loan documents don’t really mean much if the underlying funding struture does not work.
Natalie
As Nat said the future will prove her right or wrong.
Lets get back to Muslim banking.
cheers
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I seem to remember that Arab bank were offering a muslim based product a few years back.
Originally posted by Nat R:There is also a variation where the interest is capitialised for 25 years to create a larger principal amount, which is then paid off in equal payments….the increased payements are then considered to be all principal.
No such variation exists because no interest is allowed to be charged or it would not be a Muslim (Shariah) loan. Calling interest ‘principal’ does not make it principal.
As we have seen there is no way a true interest free home loan is possible…I think the phrase ASIC like to use is “Pie in the Sky”True interest free home loans have been around since the dawn of time. The Muslims share equity and this is a true interest free home loan because there is no interest charges.
Regarding your implication that the unmentionable topic cannot exist, let me assure you that it is profitable to structure an interest free loan without sharing in the equity. The scepticism you show towards this product should be management related rather than directed at the product. The level of return is the only questionable issue that needs addressing in my mind because funds cannot be raised if returns are not sufficient. This does not mean a philanthropist could not offer these loans and still make a profit.
Robert Bou-Hamdan
Mortgage AdviserRobert ..please read the 2nd section of the link I have posted below and amend your post above to A) be correct and
not be a direct attack at me.http://www.financesearch.co.uk/muslim-mortgages.html
BTW Here’s a tip for you…A little bit of research can go a long way when starting from a position where you know nothing about nothing!
Regards
Natatlie
not be a direct attack at me.You must be logged in to reply to this topic. If you don't have an account, you can register here.
