mortgages in non-Muslim countries. We live in a western society and we
live in rented accommodation so as to avoid riba. Recently we found
out that there are no houses for rent, and 96% of the market is based
on mortgages. All houses are offered for sale only.Some of them told
me that in this situation it is permissible for me to buy a house by
means ofa mortgage and, moreover, it is possible to get the mortgage
in the name of family insurance, so that the individual does not pay
riba or a mortgage; rather it is paid by the insurance. Is it
permissible to get a mortgage in the name ofthe family insurance, in
such a way that you and other trustees or borrowers are not dealing
directly with thebank and the lawyer takes care of dealing with the
mortgage on your behalf?
I hope that you can advise me as to whether that is permissible or not.
Praise be to Allaah.
A mortgage is a haraam riba-based transaction that is based on a loan
with interest in which the owner of the money takes as collateral the
property for the purchase of which the borrower is taking out the
loan, until the debt has been paid off along with the interest (riba).
If the debtor is late in making payments, then the owner of the money
is entitled to sell the property and take back his money.
This transaction is offered by riba-based banks or real estate
mortgage companies, and this transaction is done when the one whowants
to buy a house chooses a house, then hegoes to the mortgage company –
or to the riba-based bank – to ask them to buy that house and he
agrees to pay themoney in instalments, plus the interest that hasbeen
agreed upon. A representative of the company or bank meets with the
owner of the house and the third party, namely the borrower, and the
price of the house is paid in full to the owner. In some cases the
borrowerpays part of the price (down payment). And the contract is
signed with the borrower for the money paid to the owner of the house
plus the interest. The house ismortgaged to the mortgage company or
bank that pays the money to the owner of the house. If the borrower
fails to pay any instalment on his loan, the mortgage company has the
right tosell the house in order toget back the rest of the money that
it is owed bythe borrower.
This transaction clearly comes under the heading of blatant riba.
Allah, may He be exalted,has forbidden riba and has issued a warning
to those who consume it ofa severe punishment as He, may He be
exalted, says (interpretation of the meaning):
"Those who eat Riba (usury) will not stand (on the Day of
Resurrection) except likethe standing of a person beaten by Shaytaan
(Satan) leading him to insanity. That is because they say: "Trading is
onlylike Riba (usury)," whereas Allah has permitted trading and
forbidden Riba (usury). So whosoever receives an admonition from his
Lord and stops eating Riba (usury) shall not be punished for the past;
his case is for Allah (to judge); but whoever returns (to Riba
(usury)), such are the dwellers of the Fire - they will abide therein"
[al-Baqarah 2:275].
This riba-based transaction is not permissible either in Muslim
countries or non-Muslim countries; it is not permissible in order to
acquire houses or stores.
Some contemporary scholars have permitted this riba-based transaction
if it is in a non-Muslim country and it is done in order to acquire a
house in which to live. This permission is attributed to the Hanafi
madhhab, and some evidence is quoted for it. But many scholars have
challengedthis fatwa, including Shaykh Salaah as-Saawi (may Allah
preserve him)in his book Waqafaat Haadi'ah ma'a Fatwa Ibaahat
al-Qurood al-Ribawiyyah li Tamweel Shira' al-Masaakin fi'l-Mujtama'aat
al-Gharbiyyah.
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