Islamic Mortgages

What type of mortgage financing is this?

• Ijara

• Murabaha

• Diminishing Musharaka

• I have no idea

What type of financing is depicted in this image?

• Ijara

• Murabaha

• Diminishing Musharaka

• I have no idea

What type of financing is depicted in the following image?

• Ijara

• Murabaha

• Diminishing Musharaka

• I have no idea

Which of the following is Murabaha financing

• The client will make an initial contribution towards the purchase price and the Bank will agree to pay the rest. The Bank will purchase the title and the Bank will lease the property to the client

• The Bank then purchases the property from the seller, but on the day of completion it is immediately sold on to the client at a higher price

• The Bank buys the property and then leases it back to the client and the client also pays rent

Which of the following is Ijara Financing?

• The Bank then purchases the property from the seller, but on the day of completion it is immediately sold on to the client at a higher price

• The property is then purchased by the Bank, who takes its legal title. The property is then leased to the client, with payment spread over an agreed period of time

• The client will make an initial contribution towards the purchase price and the Bank will agree to pay the rest. The Bank will purchase the title and the Bank will lease the property to the client

Which of the following describes Diminishing Musharaka Financing?

• The property is then leased to the client, with payment spread over an agreed period of time (usually the mortgage term). During that time, the client also pays the Bank rent for the use of the property. Once the mortgage term has elapsed, ownership of the property is transferred back to the client

• The client will make an initial contribution towards the purchase price and the Bank will agree to pay the rest. The Bank will purchase the title and the Bank will lease the property to the client. The beneficial interest in the property is split between the client the bank

• The higher price is determined by the value of the property, and the number of years that the Bank allows the purchase price to be paid over and the amount of the first payment. The client then makes regular monthly payments until the purchase price is paid