The idea of an interest-free mortgage is not as impossible as one might believe. In fact, in an effort to increase home ownership in the state of Seattle some are floating the idea of interest-free mortgages in order to meet the needs of an untapped portion of society: Muslims.
Seattle Mayor Ed Murray raised minimum wage to $15 per hour for his constituents in Seattle in 2014 and now he is trying to get low to mid-income Muslims into their own homes without having to pay interest and violate their religious beliefs.
Photo by David Ryder/Getty Images
On July 23, Fox News reported that Seattle officials have joined the push for Sharia-compliant mortgages, with the Seattle mayor proposing these types of loans in order to provide affordable housing to the Islamic community.
So what does that mean? It means that when a Muslim wants to buy a home the lender must give them a mortgage contract that does not charge them any interest, as paying interest violates their religious belief. Many Americans would say paying interest violates some type of belief system they have as well--at least usury interest rates (the practice of lending money at unusually high rates). But the odds of getting large banks to be motivated to change their policy about charging them interest would be nil, even with a mayor advocating it.
In Seattle, however, the Muslim community is garnering support for interest-free mortgage loans, using their religious dictates as a tool in which to achieve this highly-desired objective. According to Seattle Mayor Ed Murray, this type of mortgage would only be for the low and middle income Muslim families--and only those who strictly adhere to Sharia law, since traditional mortgages would be unattainable for them, as such interest-charging mortgages (or any financial dealings involving the paying or receiving of interest) is forbidden in their faith.
Christians are commanded in their religion to not engage in usury, either, when they lend money, and they are discouraged from owing any man anything, too, but there are not any banks in America giving them loans automatically at low-interest rates just because of their religious beliefs. So should one religious belief trump another when it comes to getting a home mortgage without interest?
The obvious answer is 'no,' of course. But in this instance the Muslim community will not be getting to buy a home more cheaply than their Christian competitors, as Sharia law may dictate that Muslims not pay interest, but it does not dictate that they not pay the full value of a home--along with any profit a bank would make if they did charge interest for the home loan over time. Thus, the banker just has to make sure the contract with his Muslim client does not include the words "interest" for the financial profit that the bank will realize as a result of the home mortgage loan based on Sharia law.
read more: http://www.examiner.com/article/christians-not-missing-out-on-new-mortgage-financing-tool-offered-to-muslims
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