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  • Islamic Sharia

    Mortgage And Higher Purchase Agreement

    Posted by Saba Madani on July 20, 2020 at 5:31 pm

    I have heard Shaikh Ghamidi saying that mortgage is a higher purchase agreement, the bank buys the house and sells or rents it to you with a higher amount. Is it true? I thought that the bank lends you money to buy the house

    $ohail T replied 6 years, 3 months ago 3 Members · 3 Replies
  • 3 Replies

  • Mortgage And Higher Purchase Agreement

    $ohail T updated 6 years, 3 months ago 3 Members · 3 Replies
    Islamic Sharia

  • Umer

    Moderator July 20, 2020 at 5:45 pm

    It’s actually a hire-purchase agreement. The terms of the loan are only for the house and the bank inspects the house before buying it. They’re not lending you money which you can use at your discretion – they’re in fact buying the house.

  • Saba Madani

    Member July 20, 2020 at 5:50 pm

    Thanks

  • $ohail T

    Moderator July 20, 2020 at 5:55 pm

    There are some subtle differences though. In both – the higher purchase order and mortgage, the goods can be seized and sold by the Lender upon the Borrower’s failure to pay.

    In mortgage a first lien is the first to be paid when a borrower defaults and the property or asset was used as collateral for the debt. A first lien is paid before all other liens. A bank that holds the first mortgage on a property has the first lien.

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