Mortgage to Buy House in America

16-1-2019 | IslamWeb

Question:

What is the fatwa on mortgage to buy house in america

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Answer:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.

Mortgage is commonly used in the West and it is a prohibited Riba-based transaction as it is based on a Riba-based loan. The owner of the property mortgages the property for which he borrowed the money to the entity who lent him money until the debt is repaid in addition to its interest. In case the debtor is late in repaying, then the entity who had lent him the money has the right to sell the property to get its money.

This transaction is carried out by some Riba-based banks and mortgage companies, and it is a Riba-based transaction. This transaction is, in principle, absolutely forbidden. However, some of the contemporary scholars permitted this Riba-based transaction if it is done in a non-Muslim land but after fulfilling certain conditions, as stated in the decision of the European Council for Issuing Fataawa under the title: The Fatwa for buying homes through a Riba-based loan for Muslims in other than Muslim countries.

However, many scholars refuted this Fatwa among whom is Shaykh Salaah As-Saawy in his book entitled “Waqafaat Haadi’ah ma’a Fatwa ibaahat al-quroodh ar-ribawiyyah litamweel shiraa’ al-masaakin fi al-mujtama’aat al-gharbiyyah” (A calm reflection on the Fatwa permitting interest-based loans to finance the purchase of houses in Western communities).

Based on the above, it is safer for a person to refrain from this. Indeed, whoever fears Allah, He will make for him a way out from every difficulty and will provide for him from where he does not expect.

For more benefit, please refer to Fataawa 89489, 94116, 334303, 83308, 83650 and 298126.

Allah knows best.