Home Financing Under Islamic Banking
The main reason for the current financial and economic crisis in the U.S. is regarded as a rash of bank failures. Home Loans and Bad are said to be the main reason for the failures of the bank in the United States.
Quite simply, was that U.S. banks were on the financing of home ownership. Suppose that a potential home buyer was approaching his banker for a home loan and the creditworthiness and financial standing him a loan of, say, U.S. $ 100,000.00 entitle its bankers wouldhappy to say to him: USD 150, 000.00! Of course, this is the borrower would not be able to repay the agreed repayment rates because of its smaller capacity. This would ultimately result in a performance by the borrower, the provision of credit account is a non-performing asset.
Against the backdrop of the banking crisis in the United States and in Europe it would be useful and interesting to look at the loan finance scenario in the context of the Islamic system haveBanking.
As a rule under the Islamic banking system, the home loan on the principle of the profit mark up the cost of ownership is based, by mutual agreement between the bank and the borrower. This type of financing is usually done under the contract of Murabaha.
Es geht so. Suppose you are interested in buying your dream house (who's not!). You approach the Islamic bank with your needs in terms of funding. The bank in turn wouldTo assess your needs and assess your suitability for the funding on the basis of your income and repayment capacity. After he would provide an overview of your financial standing and creditworthiness, the Bank an eligible amount of home loans fixed for you. Let us say that the bank resolves a home credit line of USD100, 000.00 for you.
This amount would be their tracks are up on the cost of the property. This sign up is determined by mutual agreement. Assume that the surcharge is to sayUSD 10.000,00. This means that the net amount of home loans USD90, 000.00. The next step for you, the borrower, will identify your dream home in the range of USD90, 000.00. Once you details of the property so the bank that the owner of the property in turn will negotiate and make a purchase, especially by selling the same to them to identify you.
The next step would be to the formalities with a view to the complete documentation, etc., after you get --Possession of the house, if you do not already own them. The property will go into you if you pay the prescribed number of installments over the repayment period of time. Then your dream home will be yours truly!
The main features of the above type of home loan under Islamic banking are: make a thorough assessment and evaluation of the borrower's repayment ability and fixation of the corresponding loan. Another notable feature that is in fact theFoundation of Islamic banking, is serving a lack of interest on the loan. Instead of the bank adds a profit margin to the cost of the asset and divides the total amount payable in equal installments, usually monthly.
The above example is a simple way of loans from the house of Islamic banking system. Within this system, variations are possible to match the specific needs of the borrower.