How to Get Sharia Compliant Mortgage

Posted by islamicwealth on November 19th, 2014

Islamic financing is governed by Sharia laws. Despite its unique structure, Islamic banking has steadily grown over the past decade, notwithstanding global meltdowns and economic swings. With this continuing trend, it would be a complete waste not to start thinking about investing in Sharia compliant assets. With its immense success, a lot of financial analysts and scholars, along with budding Muslim investors are curious about the reasons why Muslim financial vehicles are so successful. Before that, however, you must first understand the different laws that govern Sharia/Islamic banking methods:

Islamic financing is governed by the guidelines laid down by the Sharia, which is the body of law taken from the teachings of the Holy Qur'an and the sayings (hadith) of Prophet Muhammad (pbuh). When these Islamic financing principles were first formulated, early scholars, prompted by the Sharia code, placed great considerations to justice and partnership in their financial dealings. Sharia compliant mortgages, therefore, are based on laws and principles such as:

• Wealth must only be produced by engaging in legal trade and asset-based investments.
• Financial investments involving Sharia compliant mortgages should always be ethical in nature and must serve society's greater good.
• Risk should be shared by all parties involved or everyone who have entered the financial agreement.
• The financial agreement should and cannot involve harmful activities.

Sharia rules also lay down guidelines as to which activities must be prohibited when carrying out these financial transactions. All Sharia compliant mortgages must also abide by the following prohibitions:

• Charging/receiving interest
• Using money to generate more money
• Investing in businesses and/or assets involving alcohol, drugs, gambling, pornography, and other things that is considered unlawful or immoral under Sharia standards
• Transactions that involve entering into or speculating extremely risky ventures
• Financial contracts with ambiguous, unspecified, or vague conditions, terms, rights, and obligations, or those with hidden charges

One of the biggest appeals of Sharia compliant mortgages is that they are safe and ethical, not to mention very easy to understand and carry out. If you want your investments to be halal and in complete adherence to the fundamental Islamic/Sharia codes of conduct, find investment advisors that specialise in this kind of financing. Conventional finance simply won't work if you want to keep true with Islamic principles. The best way to get Sharia compliant mortgage is to turn to experienced Muslim wealth managers who can help you with every step of your house acquisition.

About the Author:
This article is written by Brian Adams, who is the director at Islamic Wealth Management. Islamic Wealth Management was established to provide Sharia-compliant financial planning service to Muslim individuals and business owners to maximise prosperity without comprising Islamic principles.