Question:
Assalamu ‘alaykum wa rahmatullaahi wa barakatuh dear Sheikh
We live in Vancouver, Canada. After lot of research, I have come to conclusion that there is no Shari’ah compliant home mortgage in Vancouver. I contacted Manzil and they said that it is based in Ontario and they are not yet financing in Vancouver. I have come to decision of selling my property in my home country and buying a home with complete payment (no mortgage) for my family living in Vancouver. However, I have to travel to sign the paperwork and sell the property. But, due to COVID, I’m unable to travel at this point of time. My kids are very young (all below 9 years of age) and so they are not yet vaccinated and hence many traveling restrictions and lack of flights to my home country. I’m hoping I can find a way to travel by next year in shaa Allaah as some flights might open up as suggested by the news channels. So my questions are:
1. The prices of the houses are going up. If I wait till next year, I might not be able to afford a house. Is it allowed to buy a house using conventional mortgage from the bank or Islamic bank which are not completely Shari’ah compliant? After I sell the property in my home country, I pay off the bank loan as quickly as possible. And I can give sadaqa for the interest paid at the bank.
2. I’m hoping that I can buy the house completely after selling the property in my home country by next year. If due to some unexpected things happen in the value of the property in my home country, and I do not get the amount I’m hoping to then is it allowed for me to rent part of the house in Vancouver and use that money to finish off making the bank payments? For example, if I buy the house for $100,000 with the conventional bank mortgage, and I have made 20% down payment. I would still owe $80,000. After selling the property in my home country next year, if I get $60,000 and pay the bank, I would still owe $20,000. Is it allowed for me to rent part of the house and use the rent money solely for the bank payments and not for my personal use?
I’m hoping that you can shed some light in this issue and I’m eagerly looking forward to hear from you.
BarakAllaahu feekum
Answer:
In the Name of Allāh, the Most Gracious, the Most Merciful.
As-salāmu ʿalaykum wa-raḥmatullāhi wa-barakātuh.
Dear Sister,
May Allāh ﷻ reward you for your concern in adhering to His commands in all facets of life. The last year and a half have been a truly unprecedented time for all of us. With it came challenges that we would have never imagined.
We understand the difficult challenge you face and sympathize with you. On one side, you desire to purchase a home, and, absent the current pandemic and its associated restrictions, you would (ideally) have the ability to pay for it. On the other side, you have the severe warnings given by Allāh ﷻ to those who engage in interest-bearing transactions. From among the many sins that people commit, Allāh ﷻ has chosen two to single out as being causes of Him declaring war on its perpetrators. One of these is engaging in interest-bearing transactions:
يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِن كُنتُم مُّؤْمِنِينَ٠ فَإِن لَّمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِّنَ اللَّهِ وَرَسُولِهِ (سورة البقرة: ٢٤٨-٢٤٩)
“You who believe, beware of Allāh: give up any outstanding dues from interest., if you are true believers. If you do not, then be warned of war from Allāh and His Messenger.” (2:248-249).
The nature of this warning is so severe that a believer must do everything in their power to be spared of it. As such, engaging in interest-bearing transactions, whether as a lender or as a borrower, is prohibited.
In your case, we sincerely advise that you explore other options. For example, explore if an agent could sell your property for you. Due to the pandemic, many institutions have changed the requirements for being physically present for a variety of things including document signing.
Remember that the one who obeys Allāh ﷻ is never at a loss.
وَمَن يَتَّقِ اللَّهَ يَجْعَل لَّهُ مَخْرَجًا. وَيَرْزُقْهُ مِنْ حَيْثُ لَا يَحْتَسِبُ ۚ وَمَن يَتَوَكَّلْ عَلَى اللَّهِ فَهُوَ حَسْبُهُ (سورة الطلاق: ٣-٤)
“Allāh will find a way out for those who are fear Him and will provide for them from an unexpected source; Allāh will be enough for those who put their trust in Him.” (65: 3-4)
It is quite possible that if you wait just a bit longer, a viable Islāmic finance institution may expand to Vancouver. It is also possible that travel restrictions will be eased, and you can sell your property before prices rise. It should also be noted that you have even proposed the possibility that despite selling the property, an interest-bearing loan would still have to be paid. This is a very slippery slope.
For someone whom Allah has granted the concern for halal and wholesome wealth, a lapse in judgement which may lead to indulging in interest, even unwillingly, could lead to a long time of regret. Safety is in abstention and remaining cautious in such matters of wealth.
For all of these reasons, we strongly encourage you to not take a conventional loan. Rather, seek Allāh’s assistance through patience, ṣalāh, and abundant duʿā. Along with these three things, continue to explore options to help you achieve your goal of home ownership.
If you do feel there is more information that is pertinent to your situation, please feel free to reach out to us again.
And Allāh Taʿālā Knows Best
Muftī Mohammed Wahaajuddin
Farmington Hills, Michigan, USA
Checked and Approved by:
Muftī Faisal bin Abdul Hamīd al-Mahmūdī
Darul Iftaa Canada (www.fatwa.ca)