According to the Quran, Muslims do not have to pay interest and it can, therefore, be difficult to take out a loan. Therefore, the Mortgage loan has arisen. This is done in the way that the loan provider of Mortgage loans buys the property that is desired to be acquired. After that, it can be sold to the buyer, but without interest on the loan. On the other hand, the buyer gets the right to own the property and it is owned when the last payment is paid 30 years later.
The Mortgage loan has become especially popular because it is extremely competitive compared to other credit union loans on the market, and it is therefore not just Muslims who have caught the eye for this type of loan.
The interesting thing about the Mortgage loan is that it is not affected by market price changes – it is independent of this. Normally, a fall in interest rates will be accompanied by price increases, which on normal credit union loans will mean a price cut on the loan – a risk that is not borne by the Mortgage loan. Here you pay back a fixed amount every month and that does not change.
Interest-free, but at the same price
Although the Mortgage loan is an interest-free loan, you will instead have to repay a higher amount, which is equivalent to the interest you would otherwise have paid on a traditional home loan. In the end, therefore, it does not make the loan cheaper than what other bank customers have to pay, as the bank makes a profit when purchasing the property, thus offsetting the normal interest payments. In the latter, therefore, it does not make a big difference whether a normal home loan or a Mortgage loan is chosen. So where it makes a difference is if you are a Muslim believer and want to follow the Qur’an.
One of the major drawbacks of the Mortgage loan is that the lender takes a big risk, which they pay well for. Thus, a Mortgage loan can quickly become more expensive than a regular home loan. Furthermore, this type of loan is more difficult to see, and it has therefore been seen that loans have been canceled because the terms of the loan were unclear. The number of providers in the market is also very few, and it is, therefore, the loan issuer that sets the conditions, and it is therefore difficult to do anything other than paying the prices that are set since there are no alternative loan providers to go to. Therefore, Mortgage loans are not considered the most optimal, which is why you can easily look for other alternatives if you are not a Muslim.
Other Shari Loan Alternatives
If a Mortgage loan is not possible, you can Take a look at a mini loan with no security, loans without interest and fees and maybe even loan money for free. These are all types of loans that often have no interest.
You can easily find out what options you have in the market. Here at Puss in Boots, we have created a consumer loan calculator that makes it easy for you to compare the various loan options you have. Our purpose in this is to give you the opportunity to find the loans that best suit you and your needs. Enter the loan amount and age and find out here.
In this way, we help ensure that you get a better overview of a market that can be difficult to understand at times. This way we try to avoid getting a loan that is too expensive for you. If you want to make a comparison, simply enter the amount you want to borrow and the amount of maturity. Then you can see what options you have and what the individual loan providers can offer.