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  • #16
    [QUOTE=dafluff;486696]While Islamic Banking does not explicitly call it "interest", they do recognize the time value of money. The most popular way of doing this is a fixed return model called murabaha. So for example, A wants to buy a house at $100,000. Instead of getting a mortgage, the bank "buys" the house, then "sells" it to A for $150,000, and A can pay in installments. Voila...no interest, still tidy profit for the bank.

    Some advantages in that, the house buyer know what he has to pay, whereas a mortgage the lender doesn't have fixed rate interest and can be subject to the wiles of interest fluctuations, usually up, until disaster for the borrower who cannot afford repayments

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    • #17
      Originally posted by dafluff View Post
      While Islamic Banking does not explicitly call it "interest", they do recognize the time value of money. The most popular way of doing this is a fixed return model called murabaha. So for example, A wants to buy a house at $100,000. Instead of getting a mortgage, the bank "buys" the house, then "sells" it to A for $150,000, and A can pay in installments. Voila...no interest, still tidy profit for the bank.

      There are other models too, but essentially they are just variations of this.
      Lol. So they decided to play semantics... Seems to be a fair bit of winking and nudging going on there.

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      • #18
        Originally posted by Anglian View Post
        Originally posted by dafluff View Post
        While Islamic Banking does not explicitly call it "interest", they do recognize the time value of money. The most popular way of doing this is a fixed return model called murabaha. So for example, A wants to buy a house at $100,000. Instead of getting a mortgage, the bank "buys" the house, then "sells" it to A for $150,000, and A can pay in installments. Voila...no interest, still tidy profit for the bank.
        Some advantages in that, the house buyer know what he has to pay, whereas a mortgage the lender doesn't have fixed rate interest and can be subject to the wiles of interest fluctuations, usually up, until disaster for the borrower who cannot afford repayments
        Huh? Most mortgages are fixed rate and term.
        Sasa Bule is having a bayi!

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        • #19
          Originally posted by Jaime C View Post
          Huh? Most mortgages are fixed rate and term.
          my mortgage in the uk wasn't, I changed my job for a higher salary, as the bank rate went up and I had difficulty in repaying

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          • #20
            Originally posted by dafluff View Post
            While Islamic Banking does not explicitly call it "interest", they do recognize the time value of money. The most popular way of doing this is a fixed return model called murabaha. So for example, A wants to buy a house at $100,000. Instead of getting a mortgage, the bank "buys" the house, then "sells" it to A for $150,000, and A can pay in installments. Voila...no interest, still tidy profit for the bank.

            There are other models too, but essentially they are just variations of this.
            Wow, that's stupid. Maybe I'm missing something, but in your example, there is an overall interest of 50% paid to the bank. Is it the APY (annual percentage yield) type models that are not allowed in Islam, or what?

            It also seems that, yet again, the American media lied to get a bigger reaction. Perhaps they didn't do their own research in the haste of printing a controversial article. Either way, not surprised!

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            • #21
              [QUOTE=Anglian;486698]
              Originally posted by dafluff View Post
              While Islamic Banking does not explicitly call it "interest", they do recognize the time value of money. The most popular way of doing this is a fixed return model called murabaha. So for example, A wants to buy a house at $100,000. Instead of getting a mortgage, the bank "buys" the house, then "sells" it to A for $150,000, and A can pay in installments. Voila...no interest, still tidy profit for the bank.

              Some advantages in that, the house buyer know what he has to pay, whereas a mortgage the lender doesn't have fixed rate interest and can be subject to the wiles of interest fluctuations, usually up, until disaster for the borrower who cannot afford repayments
              There is another more complicated model that even allows for fluctuating "interest". In this model, buyer A and the Bank both provide capital to buy a property. Say A provides 10%, and Bank 90% (so far this is similar to a regular mortgage, where A pays a downpayment). The Bank then "rents" out its share of the property to A. This "rent" can fluctuate based on some indicator. Usually some inflation index or established bank rate. Over the period of "rental", A's share increase until A owns 100% of the property.

              A rose by any other name, really...

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              • #22
                Originally posted by ScooterIndo View Post
                I was under the impression rightly or wrongly, that it was the source of the money more than the mark up so for example if you're a pimp or a prostitute or a drug dealer for example then the money you make from your illicit trade would be considered haram in Islam.
                You are correct in saying that making money from activities which are haram or considered immoral - such as those described - is also considered haram.

                If we make our living by doing things which we should not do,we are seriously in error. Our work is not just for our material gain (alking about Muslims here, of course) but is also part of our worship and demonstration of faith to Islam.

                This is why you sometimes see Muslim truck drivers who refuse to drive loads which contain alcohol or pork, cashiers who don't want to ring up sales of alcohol or pork, etc.

                My own feeling is that, like it or not, tough as it may be, they need to make a choice between their principles and their job, rather than expecting non-Muslim employers to make allowances and exemptions for them which may go beyond what is reasonable or may damage the employer economically. I believe Dan expressed a similar view here recently on some thread. In other words, if they cannot do a certain job as the employer requires, without compromising their religious values, they need to find a different job.

                I also think that non-Muslim employers should try to make "reasonable" accommodations for Muslim workers (or for the religious needs of members of other religions), but sometimes the "demands" do go beyond what most would consider "reasonable", which I guess is why these matters sometimes wind up in civil courts.
                [FONT=Comic Sans MS]Warden: "What we got here ... is failure to communicate."

                The Dude: "Oh yeah? Well that's just, like, your opinion, man."[/FONT]

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                • #23
                  Well human nature being what it is doesn't seem to bother most if not all the corrupt agencies, MPR, Etc, one of the last ministers for religion got done for fiddling 3 trips to Mecca, he fiddled it from the Haj fund, which is meant for the poor, quite sad really as I've seen the old Haj returnees at Dubia, and their life's wish has been granted, but some miserable shite has caused 3 poor people to miss out, and like the rest here has no shame at all

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                  • #24
                    Originally posted by tihzho View Post
                    HAGGLE?

                    funny guy
                    ya hahahahahahahahahahah
                    “Friendship is born at that moment when one person says to another, ‘What! You too? I thought I was the only one.”

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                    • #25
                      Originally posted by ScooterIndo View Post
                      I was under the impression rightly or wrongly, that it was the source of the money more than the mark up so for example if you're a pimp or a prostitute or a drug dealer for example then the money you make from your illicit trade would be considered haram in Islam.
                      ya your correct, I think , no pretty sure really
                      but from my understanding its also interest
                      and going back to the merchant traders of old, the profit
                      “Friendship is born at that moment when one person says to another, ‘What! You too? I thought I was the only one.”

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                      • #26
                        Originally posted by dafluff View Post
                        While Islamic Banking does not explicitly call it "interest", they do recognize the time value of money. The most popular way of doing this is a fixed return model called murabaha. So for example, A wants to buy a house at $100,000. Instead of getting a mortgage, the bank "buys" the house, then "sells" it to A for $150,000, and A can pay in installments. Voila...no interest, still tidy profit for the bank.

                        There are other models too, but essentially they are just variations of this.
                        oh ok
                        I see how that works, guess its the modern Muslim bank
                        “Friendship is born at that moment when one person says to another, ‘What! You too? I thought I was the only one.”

                        Comment


                        • #27
                          Originally posted by Jaime C View Post
                          Huh? Most mortgages are fixed rate and term.
                          not all the time,
                          you can request the fixed term rate but when, interest rates are at a low
                          people tend to have variable rate mortgage with a portion at a fixed rate
                          “Friendship is born at that moment when one person says to another, ‘What! You too? I thought I was the only one.”

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                          • #28
                            Once again this is another example of the 'Holy Lawyers' finding loop holes and twisting around God's laws to suit our needs.
                            "God's Laws are Eternal!" except when we find a loop hole. hahaha

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                            • #29
                              Originally posted by Anglian View Post
                              my mortgage in the uk wasn't, I changed my job for a higher salary, as the bank rate went up and I had difficulty in repaying
                              I wasn't aware we were discussing UK mortgage rates.
                              Sasa Bule is having a bayi!

                              Comment


                              • #30
                                Originally posted by Jaime C View Post
                                Huh? Most mortgages are fixed rate and term.
                                if we are talking about Islamic banking compared with western banking, mortgage rates on UK move with the bank rate, now is a mortgage with an Islamic bank fixed, irrespective of what the countries bank rate is.
                                I think getting a fixed long term mortgage from a western bank highly unlikely, so I'm not clear how an Islamic bank makes a long term mortgage loan and make money in they don't have an interest rate,
                                Last edited by Anglian; 31-05-16, 22:10.

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