I am looking to buy house. I was told that there are a few bank/financial corporations that offer Islamic Financing. They are: Devon Bank http://www.devonbank.com/popup/Islamic_overview.htm Guidance Financial http://www.guidancefinancial.com/ They provide a rent-to-own option. My concern is that they calculate the rent based on the current interest rates that are set by the Federal Government. As a matter of fact, their rates are higher than a conventional bank. So is it ok get a loan through Guidance or Devon, even though they charging rent based on the current interest rate. Plus they are charging a higher rate than the regular banks. So then what’s the difference between getting a long through Guidance/Devon versus getting a loan from a regular bank. Your input on this will be truly appreciated.
The banks you have mentioned are fine, you can deal with them. There is a bank in Chicago, which also is functioning on the same pattern by the name of Broadway bank. They calculate their profit ratio with other banks and they specify the amount and there is nothing wrong with that. In another words, they do their calculations but they apply it according to the Islamic law. There is a big difference between the two types of transactions one is legitimate another is not legitimate. If someone does something from the Islamic law perspective it is appropriate versus doing something against it no matter how similar they look. One would be Halal another would-be haram.“
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