Here’s the Documents You’ll Need For Sharia Compliant Home Financing

Sharia compliant home financing is different from a traditional Western loan in one big way. With halal Islamic home financing there’s no interest or riba. What’s more, the property is held in trust until it’s paid off.

However, there are some other similarities to more traditional mortgages. Here’s a few areas where the two types are alike.

Tax Returns

All mortgage lenders will want to get an accurate picture of your financial situation. If you are in the United States, a lender will probably want you to sign a 4506-T form. That will allow them to ask the IRS for a copy of your tax returns.

Generally, you’ll need to produce at least two years’ worth of these documents. Lenders are looking for big spikes from year-to-year. They also want to ensure your yearly income is consistent with the earnings you report.

W-2s or Pay Stubs

Financial institutions will more than likely want to see some of your pay stubs. These will give a lender a good idea of your ability to repay any Halal Islamic home financing money you getYou’ll need to show a lender different kinds of proof if you are self-employed. Direct deposits are one option.

Renters’ History and Sharia Compliant Home Financing

If you’re trying to buy your first house, banks and other lending institutions will want to know that you can pay on time. They might ask you for a full year’s worth of checks that your landlord has cashed. They might also need proof from that landlord that you were reliable about paying your rent.

Keep in mind that if you don’t already have an existing credit history, this becomes even more important for getting Sharia compliant home financing

Assets and Bank Statements

Your risk profile is an important part of the application process. That’s why bankers will want to see a full portfolio of your assets and bank statements. Be ready to show any life insurance policies you have as well as investment assets.

Generally, lenders are looking to see if you have reserve mortgage payments on hand in case there’s an emergency.

Here is another important tip. Lenders will make sure that your down payment has been in your account for several months. It’s a red flag if the money shows up suddenly.


You’ll need to be able to verify that you are the person who is applying for the loan. A driver’s license is an acceptable photo ID.  A Canadian passport or a permanent resident card are also acceptable in Canada.

Credit History

One of the most important parts of getting Halal Islamic home financing is the credit report. If you have any negative items on yours like a foreclosure, you should be prepared to explain yourself.

Writing a statement helps the lender to evaluate what kind of risk you will be.

Finally, you may have had some help from family members who gave you some money. Sharia compliant home financing requires that you provide some kind of written confirmation that the money isn’t a loan.


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