ISLAM NEWSROOM: Riba - Allah Declares "WAR" on People Who Deal in Riba
Someone asked us to answer the question with a "Yes" answer!
Answer: 'Say Yes?' Are you serious?
You ask a question and then suggest the answer?
No way and we say, "Haram, brother . . ."
1.) If you just want a, 'Yes' answer, you are writing to the wrong person.
There are plenty of people out there on the internet who can make anything 'halal' (permissible) for you - and for that matter, there are many who can also make just about anything 'haram' (forbidden) too.
But I did not give up my former way of life as a Christian businessman, preacher and musician to come to the way of Islam just to make you happy with worldly matters.
2.) Second - there is nothing wrong with buying a house, or building a new home. There is also nothing wrong with borrowing money for this (without interest). Additionally, there is nothing in Islam against paying the money back over a period of time, mutually agreed upon by the lender and the borrower in installment payments (without interest).
Mortgage on House: Is it OK? - YES, it is! - BUT . . .
But - (this is the part you don't want to read) - but, it is forbidden by Allah in the Quran to deal in what is called 'riba' (interest, usuary or gain on money loaned out at interest).
Islam forbids the lender or the borrower to participate in the act of enriching someone for the use of their money. This is clearly mentioned in the last part of surah Baqarah, 2:275-281.
There are also sayings and teachings (hadeeth) from our prophet, strickly forbidding any gain on the use of money. This extends to both the borrower and the lender.
Doubtless, Muslims do participate in these activities, yet they do so at the very risk of suffering punishment from Allah.
NOTE: There have been reported to me some financial groups claiming to have "shari'ah compliance" financing.
The concept deals with the lenders participating in the ownership of the property and thereby being at some risk in the venture itself.
According to their documentation it is inline with what is permitted by Islam.
However, according to some, it has the problem of requiring a large downpayment, large monthly payments, very strick credit background (how could that be halal?) and not really owning the property until after the payments are satisfied.
I am not sure about it, but they do have some scholars who work for them, saying it is all right.
It might be all right. But again, if you are not sure, don't do it.
I pray to Allah to build you a special house in Paradise and to make it easy for you and your family here in this life, ameen.