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Mortgage and Divorce

Answered by Shaykh Salman Younas

Question: Assalam aleykum

My ex husband and I put money together to buy a house. We did a mortgage and had to put each a down-payment. We bought a house then he made the payments for the monthly mortgage.I took care of all the bills for the house including feeding. Now we are divorcing and I would like to know what is the fair way to deal with the house.

Answer: In the Name of Allah, Most Merciful and Compassionate

assalamu alaykum

This is a difficult question for which I currently do not have a conclusive legal answer.

However, even in the absence of a clear shariah legal position regarding the division of assets in such cases, what I would advise you and your ex-husband is to reach an amicable and fair settlement (sulh). This should take into account both of your contributions – whether financial or otherwise – to your home, its purchase, and maintenance.

Engaging in an amicable settlement in cases of dispute is praised by Allah who says, “If a woman fears ill treatment or aversion from her husband, then, there is no sin on them in entering into an amicable settlement between themselves. Settlement is better. Although human souls are prone to selfishness, if you do good and are mindful of God, He is well aware of all that you do.” (Qur’an, 4:128)

This is the recommended way forward when it comes to matters of dispute. It may require involving people who have legal expertise and can fairly adjudicate the matter, but it should be the first step one takes in such situations.

[Shaykh] Salman Younas

Checked and approved by Shaykh Faraz Rabbani

Shaykh Salman Younas  graduated from Stony Brook University with a degree in Political Science and Religious Studies. After studying the Islamic sciences online and with local scholars in New York, Ustadh Salman moved to Amman where he spent five years studying Islamic law, legal methodology, belief, hadith methodology, logic, Arabic, and tafsir. He is currently a PhD candidate at the University of Oxford and continues his traditional studies with scholars in the United Kingdom.

Are House Mortgages Permissible?

Answered by Ustadh Tabraze Azam

Question: Assalam alaykum

Are house mortgages permissible?

Answer: Wa alaikum assalam wa rahmatullah,

Generally, mortgages from conventional, usurious banks are going to be impermissible as they stipulate the kind of increase in a loan contract which was expressly prohibited in the Qur’an.

Allah Most High says, “O believers! Fear Allah, and give up outstanding interest if you are true believers. If you do not, then beware of a war with Allah and His Messenger! But if you repent, you may retain your principal. Do no wrong and you will not be wronged.” [2.278-279]

Accordingly, you should strive to seek out a permitted alternative, ideally from an institution or bank which has a certifying board of qualified experts.

[AAOIFI Shari‘ah Standards (518); Ghawji, Kashf Shubuhat man za‘ama Hill Arbah al-Qurud al-Masrifiyya (26)]

Please also see: What Is the Difference Between a Mortgage and a Rent-To-Own? and: Are Islamic Mortgages Really Different From Conventional Mortgages? and: Debt: How It Destroys Lives, How You Can Fight It

And Allah Most High knows best.

Wassalam,
[Ustadh] Tabraze Azam

Checked and Approved by Shaykh Faraz Rabbani

Ustadh Tabraze Azam holds a BSc in Computer Science from the University of Leicester, where he also served as the President of the Islamic Society. He memorised the entire Qur’an in his hometown of Ipswich at the tender age of sixteen, and has since studied the Islamic Sciences in traditional settings in the UK, Jordan and Turkey. He is currently pursuing advanced studies in Jordan, where he is presently based with his family.

What Is the Difference Between a Mortgage and a Rent-To-Own?

Answered by Shaykh Abdul-Rahim Reasat

Question: Assalamu alaykum

In a mortgage, the bank buys a house in my name and I pay the bank the principal plus interest for using their money. On the other hand, in rent to own, the bank buys the property in their name and I pay them rent which includes the principal and the mark-up (interest). In essence, these two are the same so why is one seen as haram and the other halal?

A scholar has the opinion that the former is technically halal as the essence is the same.

Answer: Wa ‘alaykum as-salam wa rahmatullah wa barakatuh

I pray you are well.

Giving Interest Is As Wrong As Taking It

The premise that only taking interest is impermissible is incorrect, and it directly clashes with the narration ‘The Messenger of Allah (Allah bless him and give him peace) cursed the one takes interest, the one who gives it, the one who writes [the contract], and those who witness it.’ (Muslim).

‘Islamic Mortgages’

The conventional mortgage and the ‘Islamic alternative’ are two different contracts. The former is clearly one where the buyer pays back more than he borrows, falling into the problem in the above narration. In rent-to-own alternative, the buyer owns part of the property, and the bank owns the rest.

The buyer then has two agreements with the bank: the first is to pay a sum per month as rent for living in the share owned by the bank; this is permissible in the Shariʿa, and not interest. The second agreement is to purchase some of the banks share every month over a number of years until he is the sole owner. This is also permissible in the Shariʿa.

A simple look at the outcomes of the two transaction seems like the buyer is getting money from the bank and paying more back. This is a over-simplification and incorrect.

The Implications of words

The wordings and their meanings in legal contracts have consequences and sanctity in the eyes of Allah Almighty. Otherwise, what would be the difference between a man marrying a lady with a mahr and marriage contract and then consummating that marriage, and a man who made an agreement with a lady, paid her some money and slept with her outside of marriage? An over-simplification would say that both are the same.

The jurists summed this up with the legal maxim ‘In contracts the meanings are of consequence, not just the wordings.’ (Zarqa,Sharḥ al-Qawaʾid al-fiqhiyya)

I hope that clarifies matters for you.

Wassalam,
[Shaykh] Abdul-Rahim Reasat

Shaykh Abdul-Rahim Reasat began his studies in Arabic Grammar and Morphology in 2005. After graduating with a degree in English and History he moved to Damascus in 2007 to study and sit at the feet of some of the most erudite scholars of our time.

Over the following eighteen months he studied a traditional curriculum, studying with scholars such as Shaykh Adnan Darwish, Shaykh Abdurrahman Arjan, Shaykh Hussain Darwish and Shaykh Muhammad Darwish.

In late 2008 he moved to Amman, Jordan, where he continued his studies for the next six years, in Fiqh, Usul al-Fiqh, Theology, Hadith Methodology and Commentary, Shama’il, and Logic with teachers such as Dr Ashraf Muneeb, Dr Salah Abu’l-Hajj, Dr Hamza al-Bakri, Shaykh Ahmad Hasanat, Dr Mansur Abu Zina amongst others. He was also given two licences of mastery in the science of Qur’anic recital by Shakh Samir Jabr and Shaykh Yahya Qandil.

His true passion, however, arose in the presence of Shaykh Ali Hani, considered by many to be one of the foremost tafsir scholars of our time who provided him with the keys to the vast knowledge of the Quran. With Shaykh Ali, he was able to study an extensive curriculum of Qur’anic Sciences, Tafsir, Arabic Grammar, and Rhetoric.

When he finally left Jordan for the UK in 2014, Shaykh Ali gave him his distinct blessing and still recommends students in the UK to seek out Shaykh Abdul-Rahim for Quranic studies. Since his return he has trained as a therapist and has helped a number of people overcome emotional and psychosomatic issues. He is a keen promoter of emotional and mental health.

Debt: How It Destroys Lives, How You Can Fight It

RizqwiseThe good folks at Rizqwise have a very worthy multi-part series on debt that you should really listen to.
If you haven’t got the time, this concluding episode is not to be missed. Rizqwise speak to Rehan Huda, a prominent investment banker and leading authority in Islamic Finance, about some of the key lessons we can learn from the long history of debt.
Don’t forget to subscribe to their email newsletter to stay up to date.

Debt: The Full Rizqwise Series

  • How Debt Destroys Lives, Communities, and Civilizations
    Duration: 53:11
  • How to Stay Out of Debt (For Good)
    Duration: 33:58
  • Ask Risqwise: Is investing in the stock market risky?
    Duration: 27:51
  • How to Get Back on Track With Your Debt Elimination Plan
    Duration: 29:16
  • 5 Tips to Stay Motivated While Paying Off Debt
    Duration: 29:09
  • Ask Rizqwise: Should I pay off loans before investing?
    Duration: 18:45
  • Avalanche vs Snowball: Two Very Different Ways to Pay Off Debt
    Duration: 29:51
  • Ask Rizqwise: How do I go “all in” on debt?
    Duration: 26:14
  • How to Set Your Debt Free Date
    Duration: 27:31
  • The Critical First Step to Eliminating Debt Once and For All
    Duration: 20:18
  • Ask Rizqwise: Why Credit Cards Make You Spend More Money
    Duration: 20:58
  • The Great Debate: Active vs Passive Investing
    Duration: 29:21
  • Ask Rizqwise: Getting Married and Out of Debt
    Duration: 25:38

 

Resources for seekers:

 

Is Zakat Due When My Mortgage is Greater Than My Assets?

Answered by Ustadh Tabraze Azam

Question: When I calculated all my assets my liabilities are greater due to my house mortgage payment.  In this case, zakat is due on me?

Answer: Assalamu alaikum wa rahmatullah,

I hope you are in the best of health and spirits, insha’Allah.

A house mortgage is considered a long-term debt. As such, one may only deduct the immediate, upcoming payment. [`Ala al-Din `Abidin, al-Hadiyya al-`Ala’iyya]

For example, consider the following scenario:

[1] Nisab is $5,000 (for an accurate figure, see: e-nisab.com)

[2] You have zakatable assets worth $10,000;

[3] And a long term mortgage of $250,000 of which one pays monthly installments of $2,500;

One deducts the immediate payment of $2500 and pays zakat on $7,500.

On the other hand, if one’s immediate payment was $6,000, one would be left with $4,000 which is below nisab and hence non-zakatable.

See also: Zakat & Long-Term Debts

And Allah alone gives success.

Wassalam,

Tabraze Azam

Checked & Approved by Faraz Rabbani

Renting Out Property Purchased Through Mortgage, and Wearing Shirts Sponsored by Unlawful Companies

Answered by Shaykh Faraz A. Khan

Question: (1) One of my family properties we have on rent is on mortgage. So is the rent from the mortgaged house classified as haram income? We do not consume interest money from the bank because we told the bank not to give us interest money. But i know that mortgages are haram and my intention is to get rid of it as soon as i get a job. I just hope that the income is not haram.

(2) Furthermore, i am aspiring to become a professional footballer (soccer player). So i would like to ask if the shirt sponsorship is a haram company such as a bank or beer company, would it be haram to wear it? Would the income become haram if i wore it?

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states.

(1) The rent contract is a separate transaction from the home mortgage, and so the rent you earn is lawful income. When one acquires a house by conventional mortgage, then the house does come into the person’s ownership, despite the unlawful aspect of giving interest. As such, one may rent out that property. Of course, as you state, you should get rid of the mortgage as soon as possible, within reasonable circumstances.

(2) Wearing a shirt sponsoring an unlawful company would be sinful, yet this has no bearing on the income you earn for playing the sport. You might want to consult a local scholar for advice about playing professional sports, as there are some ethical issues that arise in such a profession.

And Allah knows best.
wassalam
Faraz

Checked & Approved by Faraz Rabbani

Do I Have to Move Out if My Parents Get a Home by Contemporary Mortgage?

Answered by Shaykh Faraz A. Khan

Question: My parents recently bought a house on mortgage. I tried to advise them against it, but they won’t listen. Sheikhs I’ve asked have given me two main alternatives, (1) live with my parents and refuse to pay any of the mortgage payments, just paying the basic bills (my parents are fine with this) or (2) live alone (my parents are not so fine with this). I need further advice.

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states.

Your responsibility is to advise them with gentleness and wisdom, yet you are not obliged to move out. And if they are upset with your moving out, then it is definitely not advisable. Live with them and treat them with excellence. Show them the beauty of a life of piety (taqwa), through your behavior and character more than your words.

You can also direct them to viable shariah-compliant alternatives in the Islamic finance sector, by which they may still gain ownership of a home. Lastly, a scholar should be consulted to assess their personal situation and what options they might have.

And Allah knows best.
wassalam
Faraz A. Khan

Checked & Approved by Faraz Rabbani