Question:: I am a simple muslim residing in the UK. Alhamdo-lellah until now I did the best of my try to earn halal and avoid interest. Now I feel I should buy a house of my own (my children being growing). There is a prelimenary Islamic modaraba and ijara home purchase introduced by a bank in UK.Unfortunately some of its conditions are difficult to meet by an average earner like me e.g a condition of 20% down payment is a prerequisite, it is difficult to provide that much money. So I cannot avail it. I can afford the conventional mortgage. I realy feel 'krahiyat' for it, but I do not know what to do. Is the conventional mortgage allowed in Islam in any way? or I have to live in a rented house for life.
May Allah guide us and give you the best of the returns for guidance in this regard.
Answer: Answered by Sheikh Yusuf Talal DeLorenzo
There are a couple of things here to keep in mind.
Firstly, there are a number of fatawa on the subject of financing homes in the USA and Europe by means of conventional mortgages. While some prohibit it, others allow it on the grounds of legal necessity, or darurah. The classical jurists accounted one's mount (markab, or means of transportation) and one's residence (maskan) among their "original needs" for purposes of Zakah. Given the importance of these items to the financial well-being of the individual, and of the community, modern scholars have allowed their purchase by means of conventional, interest-based financing in countries where Islamic financing is not available. Those scholars includeShaykh Mustafa al Zarqa, Sh. Mish`al Al Mubarak, Sh. Yusuf al Qaradawi,and others.
Today, in many countries in the West, there are one or two companies offering "Islamic" financing for homes. The fact is, however, that such companies are very small, and the risk of dealing with them is so high as to be prohibitive. Moreover, the "Islamic" financing they offer is often suspect. So, in real terms, It appears that generally speaking reasonable "Islamic" alternatives are still not available in most Western countries. Under these circumstances, your seeking conventional financing is perfectly acceptable.
If, in the future, truly reliable and authentic forms of Islamic financing become a viable alternative, then you may want to refinance your home by that means. But, in the meantime, you may rely on conventional financing if you feel that your need is a real one. Otherwise, you may prefer to wait until Islamic financing becomes available to you.