Question:: I own 3 properties on interest based mortgage. I receive rental income from 2 properties and live in one. There are surpluses on rental income after paying monthly interest and other expenses. However, I use the surplus to repay my personal loan. ( Allah willing, I am seeking an Islamic solution to my financial affairs)
Please comment on my situation and advise me if I could borrow further(interest bearing) to help the Muslims in Chechnya. May Allah help us all!
Answer: Answered by Sheikh Yusuf Talal DeLorenzo
A number of eminent scholars have written fatwas on the subject of mortgages. Some, like Shaykh Mustafa al Zarqa and Shaykh Mishal ibn Mubarak have written about mortgages for Muslims in the United States. The obvious Shari`ah ruling on the matter is that since conventional mortgages involve interest they are unlawful. However, for a number of reasons, including the lack of an acceptable Islamic alternative, many scholars have written that it is lawful for those who reside in non-Islamic countries to purchase a home with a mortgage. Part of the reason for allowing this exception to the rule is that Islam considers one's home and means of transportation (al maskan wa al markab) to be among the absolute essentials (al hawa'ij al asliyyah). Thus, the scholars who have written these fatwas are careful to note that the permission may be granted only for one's primary residence. If one seeks a mortgage for investment purposes, either for resale (through what is commonly termed a "spec" house) or for income (through rent payments in excess of the mortgage payments), one will not be allowed to take advantage of this special exception.
In other words, the Islamically acceptable need is for a place of residence; beyond that if you own other homes, they are not covered by the same need; and they are therefore not granted the same exception.
On the brighter side, it appears that a number of Islamic banks and financialinstitutions are beginning to test the waters, so to speak, in the US and otherMuslim minority countries, in anticipation of offering Shariah compliantalternatives to mortgages. If you are looking for Islamic solutions to yourfinancial affairs, I would suggest that you begin by doing some research onwhether or not reliable Islamic alternatives are available. And Allah knowsbest.
Muslim Investor Note: Please check our Mortgage section for more detail on organizations offering Islamic alternatives to conventional interest-based mortgage.