Ijara financing is an excellent way for Muslims to get the money they need to get involved in the North American housing market. Through a relatively simple to understand product that comes in the form of an Ijara loan, the average person who wants to stay Sharia compliant can qualify and get the house of their dreams. However, there are a few items along the way that people should understand so they aren’t confused about operating as a Muslim in the North American markets and enjoying real estate. Here’s brief rundown of what’s different and what’s the same when it comes to Ijara financing versus more traditional western style loans.
What’s different
- Perhaps what’s most important is the fact that you wont pay riba or interest on your ijara loan. The system is set up so that you pay the money you owe to a trust that holds the property for you and then sells it back to you for a dollar when everything is paid off.
- Ijara financing is Sharia compliant. That means that as a practicing Muslim , you get the benefits of owning real estate and at the same time staying on the right side of your beliefs.
What’s the same:
- Ijara financing has some basic requirements as far as your credit goes. Remember that a big part of getting an ijara loan is about proving you deserve it to the lending institution. That means you need to have a decent credit score to show that you’ve been responsible with money and will continue to do so when you get a loan. Making sure that you have this important prerequisite in order can be a deal breaker for being approved or rejected for an ijara loan.
- You’ll see the same benefits of buying into the real estate market with ijara financing. You’ll own the property and be free to sell it or do with it as you wish. That’s no different from the more traditional loan.
In the end you’ll soon find after doing a little research that ijara financing is the best route to take to enjoy the benefits of homeownership while staying Sharia compliant at the same time.