One issue is that the world of interst today is so wide that you can probably find only a select few things to pick on in relation to what is mentioned in our classical literature. Secondly, Riba has been clearly defined in some cases when it comes to trade or exchange of things however from the perspective of sale at least I have not come across any convincing or at least material which gives me a convincing explanation of Riba.
For instance, someone said time based value of money is Riba. According to all classical jurisprudence and literature, this is not true. Time does have a portion of the price, this is the very basis of a Muraba transaction where the cash price is increased to a much higher value (almost all Islamic financial institutions do this based on how conventional banks calcualate interest rates in a mortgage) for deferred payment. What I cannot seem to dsitinguish despite reading up Mufti Taqi Usmani, Mahmoud A El-Gamal and other literature I have found on this is that what makes it Islamic when conpared to a fixed rate mortgage. Conceptually they are the same. All material I have researched, they just go one to say that Muraba is halal whereas the conventional mortage is interest based assuming as if one is going to refinance it. If I do not refinance it, to me it ends up being absolutely no different than the Islamic alternative being offered.
Can someone please elaborate on the fine point I am missing?
Peace USResident
We've had discussions in the past regarding interest so I would like to reiterate my stance on it. Firstly, that it is haram. Any fatwa given for it is specific to the person who does it.
There are two issues at hand the giving of riba and the taking of riba.
Both of which are haram, the giving of it i.e. in mortgage is usually due to hardships in lifestyle for other alternatives. I may arguably reluctantly go in to a mortgage one day, believing it to be a sin and for it shall seek much forgiveness, but I will never call it an acceptable thing and will never advocate it, unless the lender is doing so on 0% interest.
Traditionally houses like consumables are considered to devalue in time, i.e. they require maintenance, whereas food rots and goes bad, etc.
However, due to inflation which is a modern phenomena the prices invariably increase (in a "healthy economy". It could well be that interest based finance systems act as catalysts to this increase as well.
All the Arabic names given to the Islamic finance mortgage alternatives are really not Islamic at all. They are pre-Islamic methods of loan for profit.
Islamic mortgage will undoubtedly be non-profit and completely charitable in nature. So a loan is given on the basis of Karz-e-hasana. To which a return is given in due course and in the end the debtee may choose out of etiquette to add a gift for the help given.
In the so-called Islamic mortgages there is also no way a poor family can undertake it. Since the amount required for deposit is so high that only richer people can do it. Infact, high street bank mortgages are far more easier to come by in this regard.
Both systems are extortionistic and this is also not allowed in Islam ... i.e. to create a false value purely because people need homes. To play on the needs of people is unIslamic. The overheads asked for regarding Islamic mortgages are so high that they equal and in some cases exceed the repayments of standard mortgages. Lastly, the deeds of the house are not divulged to the buyers until they make full payment ... this is considered as the deposit ... so really it is a clever game that has been developed, the sort of games that the Jews played with the fish on Saturdays - you know the story.
However, all this said if there is a need, explain this to a local mufti get ijaza and do what you need to do and seek forgiveness always and try to make it your first and last situation. That is what I advise.
