Ahmed and Aisha, buying a home the halal way
Meet Ahmed and Aisha, who are looking to buy a larger house for their growing family.
Ahmed and Aisha have decided that the time is right to move to a larger house which will accommodate their needs better. In order to buy their new home they are selling the house they currently live in. The equity released, combined with some savings, will give them a deposit of 20% for their next purchase. They are undergoing the conveyancing process for both sale and purchase at the same time and they are keen to keep any upfront costs to a minimum.
The couple’s existing home is financed through a conventional mortgage provider. However, they would like to take a Sharia compliant mortgage alternative for their next home and have opted for the Fixed rental rate Home Purchase Plan (HPP) from Al Rayan Bank. They feel reassured that as the largest provider of Sharia compliant retail banking products in the UK, with a Sharia Supervisory Committee to oversee its products, Al Rayan Bank is right for them.
As a Sharia compliant mortgage alternative, Al Rayan Bank’s HPP allows them to buy a home in a way that is permitted in Islam, without interest. Also, when compared to conventional mortgages, Al Rayan Bank’s HPP comes out even better than they expected as it offers a range of features that suit the couple’s situation well.
With the Al Rayan Bank Fixed rental rate HPP the couple only need a 20% deposit and the rental rate is fixed for two years, allowing them to plan their outgoings.
Also, after the fixed rental rate ends, Ahmed and Aisha would like to be able to make extra capital payments to clear the finance ahead of schedule. The couple are also reassured that if they decide to settle their finance at any time, for example by selling the property, they will not have to pay an early payment charge.
Finally, with a sale and purchase in the process they are keen to keep their upfront costs down. This is ideal with an Al Rayan Bank HPP which has a low administration fee of just £399.
Ahmed and Aisha are not real people, but their situation is one that is shared by many of Al Rayan Bank’s customers. Al Rayan Bank not only offers a range of features that provide customers with flexibility and value, but their HPPs are also fully Sharia compliant, meaning that customers can have a home finance package that does not compromise the principles of their faith.
- How do Islamic home finance products work?
- How is Islamic home finance different to a mortgage?
- How are the fees for Islamic home finance different?
- What happens if I want to settle my home finance early?
- What happens in a negative equity situation?
- Why do Islamic banks use conventional indices as benchmarks for home finance?
- Why don't Islamic banks use local rental rates as benchmarks for home finance products?
- Doesn't your home finance product involve two contracts in one, which is prohibited?
- As partners in a property, why is the customer responsible for buildings insurance and maintenance?