Mortgage Help For Those Seeking An Islamic Mortgage Quote To Best Suit Their Circumstances
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Can I have a Sharia Mortgage for a Buy To Let, Right To Buy or Key Worker?
Right to Buy
Muslim borrowers are unable to apply for right-to-buy or other home ownership schemes on Muslim mortgages although the government has promised that it will be looking into these restrictions, and seeking to establish a solution for Muslim borrowers. Currently there is no decision to amend the Act.
Key Worker Scheme
Under the scheme, key workers (like nurses for example) are borrowed money from the Government to act as a deposit for their property, this is to help them purchase a property normally from a housing association. In such a case, any percentage paid as a deposit is paid back to the Housing Corporation when the property is sold. , thus the property has a second charge on it. Under Muslim-compliant mortgages , because the bank has to be named on the title deeds, it also owns the property; and thus can not have a second charge on the property.
Buy To Let
There are several lenders who offer Buy to Let Muslim Mortgages; however you should take note that under current rules, the majority of Buy to let transactions is not regulated by the Financial Services Authority. Earning an income from property is considered permissible within Islam, subject to the property not being involved with immoral or prohibitive activities, such as gambling or the sale of alcohol.
The islamic Buy to Let scheme falls under the rules of Musharaka and Ijara methods, the method followed here is the same as if you were to buy the property for your own residence. Deposits for the islamic Buy to Lets are around 25% of the properties value, and you must rent out your Buy to Let property only on what is known as a Short Hold Tenancy.
Sharia Mortgages Frequently Asked Questions
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