In NZ we've just had a company launch "islamic home loans". The idea is that Muslims aren't allowed to pay interest so with a bit of money laundering and stacking the odds in the favour of the loan company you can still get finance. Does this deception really find favour with the clerics? ref: http://www.scoop.co.nz/stories/BU0609/S00500.htm
The way I look at it with the afforded information is as follows: Gaining interest in a bank is prohibited, but the buying, selling, and trading of stock (property) is acceptable. A wealthy person buys the home, and leases it, making profit off of the property it's self by leasing it out. The person leasing the property from the owner is paying for the use of said property, but at the same time invests in other property, with the aim of making a profit. If, by the end of a certain period, if the person with the lease wishes to purchase the house, they may do so. It seems rather similar to a rent-to-buy agreement. No interest is charged, nor accepted. It looks to me like 2 different acceptable services have been bundled into one contract to aid in convenience and planning. The main difference here is that the person with the lease does not own any portion of the home at any time, but rather owns a separate stock account. So if their stock account crashes, they loose progress towards owning the home, but if the property market crashes, they might have a chance to buy the home outright sooner.
So in other words, it's fine to take a muslim's shirt as a landlord, but you're damned if you try to get a tiny bit of interest in a sale?
Or rather - it's fine to keep paying rent and never getting ahead but you're damned if you try and stand on your own two feet.
Same was true in the Catholic Church until not so long ago. Usury...As a result all the money lenders were Jews to finance war/exploration etc and so on.
Early Muslims didn't know about interest, so if interest is good or bad was determined by using logic, as the problem isn't when you - a small investor with a bank account - take interest from the bank, the problem as the the bank take interest from people who take loans because they are in some kind of trouble, so they need money, Islam doesn't allow muslims is to take advantage of people in trouble and charge them more money for a loan, so the money the bank will give you is taken form someone else trouble, you sure have heard a lot about people in trouble because of interest over loans they get.
Wow, they have to put up 20% to even qualify for a purchase and then they must decide in the initial ten year purchase whether they will go ahead with the deal or not. If they back out, do Muslims get a piece of the pie or is it simply counted as rent money?
It's not 20% to the owner. It's 20% in savings towards the potential to buy the house, instead of making a 20% down payment. No interest is payed on said savings, but rather it is invested in stock to make profit, through the buying and selling of stock. If it is invested well, this will substantially increase the value of this account. The account still belongs to the family leasing the house, and they can use this account, along with other savings, to purchase the house from the person that they are paying the lease too. I believe that the lease payments are handled separately from the stock account. Because they do not own the home, but rather own a stock account, if they get behind in their payments they get kicked out of the house, but don't loose this investment. By the same token, if they are behind on taxes, the house cannot be seized to pay said taxes, but rather the taxes would be taken out of the account, which actually provides a bit of security.
Getting a mortgage and buying a house is surely a sign of stability and success, not being in trouble?! Lets hope the fine print reads the same way. In NZ most taxes are paid as you earn so it's not an issue. I wonder what happens when the 10 years is up and the house has gained in value - is the home owner left with a bigger debt?