Some lenders on Fiducia Commercial Network’s lender panel support Sharia-Compliant finance.
Sharia Finance principles are derived from Islamic teachings and encourage ‘fair play’ that promotes fairer, more socially responsible ways of conducting financial affairs.
Sharia mortgages do not charge interest, as this is forbidden in Islam. Commonly, the bank purchases the property on the clients behalf and becomes the legal owner, the client then pays the bank a fixed amount of rent or profit until they own the property outright.
Sharia mortgages are not restricted just to Islamic clients, they can be used by non-Islamic clients as well.
Sharia Mortgages
Lenders can observe different types of Sharia mortgages, for example:
Nomo Bank
Uses Commodity Murabaha (a type of Sharia compliance) to facilitate rental property finance.
Commodity Murabaha involves the lender facilitating a sale of metal commodities to the client for the amount equal to the finance amount and bank profit-rate. This amount will be repaid on a deferred basis over the chosen repayment period.
The client will take ownership of the metal commodity and consequently sell to a third party. With the lender doing this on the client’s behalf.
Gatehouse Bank
Their Buy-to-Let purchase plans offer you a Sharia-compliant alternative to a mainstream Buy-to-Let mortgage – ’Acquisition and Rent’ products (the Sharia-compliant alternative to a conventional repayment mortgage) and ‘Rent Only’ products (the Shariah-compliant alternative to a conventional interest-only mortgage).
With a Buy-to-Let purchase plan you buy the property jointly – your deposit is your stake, and they fund the rest.
Once all your payments are made (including any final lump sum payments for Rent Only), the deed of the property transfers to you.
You are free to sell the property any time (Early Redemption Charges may apply) and any profit made on the sale is retained by you.
Any questions regarding Fiducia Commercial Network’s International and Ex-pat Property Finance proposition, please contact the BDM team – bdm@fiduciagroup.co.uk
To discuss Fiducia Commercial Network or to apply to become an Appointed Representative email the team via by clicking this link.
