There are two options available to you that correspond with Muslim law:

• The Murabaha (Deferred sale finance) Mortgage
• The Ijara (lease to own) Mortgage

The Murabaha Mortgage:

This is only really an option for individuals/families who have a fair amount of capital behind them, because it is a condition of this Mortgage package that you are expected to pay (circa.) 20% of your home’s value, on the day of purchase. However from that day the house will be registered as your own. You may pay off any debt that is outstanding on your home at any point. This package offers a fixed repayment period that is agreed between you and your lender, any a monthly repayment amount that is fixed for the term of your mortgage.

So how does the Murabaha Mortgage work?; When you find the house that you wish to buy, you arrange a sale price with the vendor as normal, however the bank pays the purchase price, then immediately sells the house to you at a higher price (the higher price is determined by the original price of the property, and the repayment period that you will have agreed with the lender), minus the percentage you pay as deposit.

The Ijara Mortgage:

This is a slightly more popular choice of mortgage, as you do not need a large amount of capital behind you to set up this mortgage, it is also slightly more flexible than its counterpart. An extra benefit to this type of mortgage is that it can even be taken out to replace an existing interest mortgage. The amount you pay each month is usually fixed yearly. The outstanding balance can be paid off at any time (usually) without incurring any penalties.

So how does the Ijara Mortgage work?; As with the Murabaha mortgage, you find a property that you wish to buy, and agree a purchase price with the vendor, the difference is that; your lender will then purchase, and gain ownership of the property. You will enter into a lease agreement with the lender. Each month you will be expected to pay rent to your lender and a contribution towards the purchase of your property.

Islamic Mortgage

UNB IslamicMortgage is a diminishing ownership product that is based on Ijara principles. The amount paid by the customer results in the customer’s beneficial interest the property increasing.

United National Bank is a UK registered bank that is authorised and regulated by the Financial Services Authority (FSA).

How it works?
You will have to complete the mortgage application form. UNB will use this to consider your application.

Once UNB is satisfied that you have fulfilled their criteria they will send you an offer letter. This will describe the offer terms.

On completion we will pay the amount UNB is willing to pay towards the purchase of the property to your solicitor. You will pay the difference between this amount and the actual purchase price of the property. UNB will be registered at HM Land registry as the legal owner of the property.

You will lease the property from UNB for an agreed number of years. You will pay monthly instalments towards the sale price of the property as well as rent for the duration of the mortgage term. And once you have paid the sale price and the rent due to UNB the property will be transferred into your name.

Qualifying criteria
Suitable for those in permanent employment or the self-employed. Who are able to pay the purchase price before the age of 65. Minimum age 18.

• Credit check
• Bank statements
• Employment status check
• Minimum deposit
• UK national or foreign nationals with appropriate residency status.
• Minimum deposit requirement20%

Qualifying Property & Value
All types of residential property, owner occupied property considered in England, Scotland, & Wales.

Other properties are subject to Bank approval.

Minimum value subject to Bank approval.

Payment terms
25 years.

Income Multiplier
3 times primary annual income (sole applicants).

3 times the higher income plus 1 times the lower income or 2.5 times combined income for joint applicants.

Shariah panel / advisors

• Mufti Abdul Kadir Barkatullah
• Dr. Muhammad Imran Usmani

Manzil Home Purchase Plans
Manzil differs from a conventional 'interest' mortgage because we are able to provide financial help without our clients having to pay us interest. We can do this by employing the Ijarah method of Islamic Finance.

How it works?

Ijara

Under Ijara the bank will buy and own your chosen property.

We then sell it to you for the same price with payment spread over a period of up to 25 years.

While you are buying the property from the bank we will also charge you rent for living in a property we own.

The bank therefore makes its profit from the rent we receive from you and, once you have paid us the full purchase price, the property will become yours.

The bank therefore makes its profit from the higher sale price of the property.

Qualifying criteria

Suitable for those in permanent employment or the self-employed. Who are able to pay the purchase price before the age of 65. Minimum age 18.

• Bank statements
• Credit check
• Employment status check
• Minimum deposit.
• Minimum deposit requirement
• 20% of property value up to £100,000.

17% of property value £100,000 to £250,000 (max 17%).

25% of property value for Non-UK residents, for applicants working aboard, or for buy-to-let properties.

Qualifying Property & Value
All types of residential property, owner occupied property considered in England & Wales.

Minimum lease term; 40 years-unexpired in excess of the payment period (currently excluding right to buy).

Minimum property value – £50,000 (residential)

Minimum finance amount – £40,000

Buy to let property value – £100,000

Minimum finance amount – £60,000

Payment terms
Ijara – up to 25 years, minimum term 7.5 years.

Max 15 years for non-UK residents

Income Multiplier
3 times primary annual income (sole applicants).

3 times the higher income plus 1 times the lower income or 2.5 times combined income for joint applicants, however, we will look at each case on its own merits.

Shariah panel / advisors

• Shaikh Nizam Yaquby
• Justice (Retd) Muhammed Taqi Usmani

Alburaq Home Finance

ABC International Bank (ABC) and Bristol & West plc offer you Alburaq – Islamic Home Finance. Then ABC International Bank and Bristol & West will provide all the technical expertise and support, plus the home finance itself. Alburaq Home Finance is based on the principles of Ijara and Diminishing Musharakah

Instead of lending money for a property, Bristol &West will buy the home, contributing up to 90 per cent of the purchase price. You will pay the remaining share and pay the outstanding sum over an agreed term, together with a rental payment.

Alburaq is a registered trade mark of ABC International Bank plc and is the brand name under which home finance product is provided.

How it works?

Alburaq offers:

• First time buyer / home mover mortgages
• Buy to let options (for up to 10 properties)
• Self cert. options

Described simply, both you and the Bank will each contribute towards the purchase of the home. For example, the Bank may contribute 90% and you 10% of the purchase price. Over a period of up to 25 years, you will make monthly purchase instalments through which the Bank will sell its share (90%) of the home to you. With each payment instalment, the Bank’s share in the property diminishes while your share correspondingly increases. While the purchase instalments are being made, the Bank will charge you a rent for the use of its share of the property, the rent being calculated according to the respective shares owned:

Step 1 – You make an initial payment to Bristol & West of at least 10% of the property value. You sign two contracts, the Diminishing Musharakah contract and the Ijara contract. Then you promise to purchase the remaining 90% of the property over an agreed period and you agree to pay rent to Bristol and West.

Step 2 – Bristol & West contributes up to 90% of the property value and buys the property on your behalf

Step 3 – The property is then transferred to you from the seller.

Step 4 – The property deeds are transferred to Bristol & West.

Step 5 – When you have purchased the property completely, the property deeds are transferred to you.

Qualifying criteria

Minimum Age:

18 – Residential Standard

21 – Self Certification

As with any conventional property financing, the decision to fund the purchase of the property will be based on our belief in your ability to meet your payments. In reaching this decision, you will be required to provide certain information, some of which is contained in the application form, and the following will also be considered:

Your income and expenditure

How you have handled your financial affairs in the past
Information received about your financial affairs from, for example, credit reference agencies and any other "referees" which you may provide
Credit assessment techniques which take all your personal details and establish your creditworthiness
Your age
The nature of the property and its condition.
Minimum deposit requirement

RESIDENTIAL APPLICATIONS:

£15,001 – £500,000: 90% of the value of the property
£500,001 – £1,000,000: 75% of the value of the property
£1,000,001 – £2,000,000: 70% of the value of the property
Above £2,000,000: Please contact us.

SELF CERTIFICATION APPLICATIONS:

£25,001 – £500,000: 85% of the value of the property
Exceptions to the above criteria will be looked at by Bristol & West on an individual basis.

Qualifying Property & Value

Minimum finance amount is £15,001 for purchases and £25,001 for refinances
Purchase a freehold or a leasehold flat or house (subject to a minimum lease length of 70 years)
The maximum finance allowed for individual properties is £400,000, being up to 85% of the property value
The maximum finance allowed for individual properties is £500,000, being up to 75% of the property value
Multiple properties/ portfolios are allowable; The rent you charge your tenant must be at least 115% of the rental payment you must pay each month; The property must have a value of £40,000 or more
A basic valuation is required. In addition, the Valuer will evaluate the ease of letting the property and provide an estimate of the likely income from renting the property unfurnished.

Payment terms

You can take Islamic Home Finance for between 7 and 25 years. And you can pay off the balance of the purchase price from Bristol & West at any time.

Income Multiplier

Where 1 applicant has gross income* of at least £20,000:

4.0 x main + 1 or 3.25 x joint

Where gross income* is less than £20,000:

3.5 x main + 1 or 2.75 x joint

Residential Applications - Self Employed allowable income will normally be calculated as an average of the last 2 years Net Profit shown in the Accounts, subject to stable/ increasing Net Profit levels.

Self – Certification Applications - Employed applicants must have held employment for 6 months, Self Employed applicants must have traded for a minimum of 12 months.

Shariah panel / advisors

• Shaikh Nizam Yaquby (Chair)
• Mufti Abdul Kadir Barkatullah
• Mufti Muhammad Nurullah Shikder

Amanah Home Finance

Amanah Home Finance is based on the Diminishing Musharakah mode of financing and helps you buy your residential property without compromising your beliefs. If you already have a traditional interest based mortgage, the product allows you to refinance your property.

How it works

The Bank's interest will decline by the same proportion. The property will be leased to you for the financing term and you will pay rent.

You choose the property you want to buy and make an application. If you meet the criteria, financing will be agreed, then the following steps will take place:

Your solicitor or other legal adviser will be sent the legal documents, and will explain these to you.
If you then want to continue, you will be asked to sign the Amanah Home Finance letter. By doing this you will accept that the financing will be made available to you in accordance with the terms of the Amanah Home Finance letter. This means that the product terms and the obligation to enter into the associated documentation becomes binding at this time
Your solicitor or other legal adviser will make sure the title of the property is acceptable and approve the contract for the purchase of the property, ensuring that the contract to buy is capable of being transferred to us.
Contracts will be exchanged either with the person you are buying the property from, or you in the case of a refinance and a completion date agreed. This will be a binding contract for the purchase of the property. A date will be agreed for completion when the trust will be set up and the property leased to you.
At completion, the property will be held in trust by HSBC Trust Company for each of us in shares equal to our contribution to the purchase price, e.g. 10% for you if you have paid a 10% deposit and 90% for us if that is the amount of financing we have provided.
HSBC Trust Company as trustee will lease the property to you for the financing term. Our solicitor will register ownership of the property and the Trust Deed. Your solicitor or other legal adviser will register your ownership of tenancy in your name.

You'll need to make a monthly Amanah Home Finance payment to us for the term of your finance. The payments will be made on the 25th of every month, and will be collected from your account by Direct Debit. Your payment will comprise: rent, contribution payment and Charges, if applicable (any other sums payable for a leasehold property and buildings insurance if arranged by the bank).

For each monthly payment that you make you will pay the bank rent for the use of our share of the property and acquire an additional share for yourself. At the end of the agreed term, and when all payments have been made, you can exercise the promise to sell and we will transfer the property to you.

You can also purchase our interest in the property from us by exercising the promise to sell at anytime during the term of the finance.

Qualifying criteria

Suitable for those in permanent employment or the self-employed. UK national or foreign nationals with appropriate residency status.

Qualifying ages are 18-65 (70 ONLY with proof of income after retirement and at discretion ofApproval Manager – each case assessed on merit)

Credit check
Minimum deposit (10%)
Documentation required or information needed at hand for making an application are:

• Proof of ID – Valid Passport
• Proof of Address – Driving Licence withexisting address or a recently paid utility bill
• Proof of Income – Last 3 months payslips orlast 3 years accounts arranged by a registered accountant
• Proof of Affordability and Financial Competence – Last 3 months bankstatement.
• Minimum deposit requirement
• 10% for mortgages up to £299,000

Qualifying Property & Value

Qualifying Properties:

Freehold Domestic Residential Properties in England and Wales.
Leasehold Domestic Residential Properties, including flats and maisonettes. With an unexpired lease term minimum 50 years plus the term of the tenancy (subject to landlord's consent if required, for us to let the property to you).

Non Qualifying Properties:

• Commercial Properties.
• Properties outside England & Wales.
• Buy to let properties.
• Shared ownership.

Please note: Any offer of finance on qualifying properties will be subject to status and a satisfactory valuer's report.

£25,000 is the minimum amount of finance available through Amanah Home Finance and your chosen property must be valued at £28,000 or more.

Payment terms

Up to 30 years, or the age of 70.

Income Multiplier

Applicants can make one application – i.e. potentially 6 incomes cantaken into account when assessing an application. Salary multiples are not used but affordability calculated using customersearnings and outgoings.

Shariah panel / advisors

• Justice (Retd) Muhammed Taqi Usmani
• Shaikh Nizam Yaquby
• Dr. Mohamed A. Elgari
• Dr. Muhammed Imran Usmani

Buying a home is most people's biggest financial commitment. It can be time-consuming, expensive and frustrating. To make matters worse, horror stories abound of gazumping, duff surveys and rogue estate agents.

You can make the process smoother by equiping yourself with the right information.

Lenders:

• HSBC Amanah
• Alburaq
• Ahli United Bank
• United National Bank

Conventional mortgage loans are interest-bearing, in conflict with Islamic Principles, and therefore Haram (prohibited) by Shariah. This has presented difficulties for the finance industry and created barriers to homeownership for UK Muslims.

With the introduction of Halal (permissible) mortgages in the UK finance market, dedicated Muslims can now have a choice. They can purchase homes or refinance existing mortgages using faith-based options. Halal mortgages are structured differently than conventional interest bearing mortgages, so they are Shariah compliant and are inline with Islamic principles.

The two most common forms of Shariah compliant home purchase finance are Ijara and Musharaka. According to practitioners of Islamic banking and scholars, these methods are the most suitable means for purchasing property in the UK. Both Ijara and Musharaka are long established Islamic financing principles.

Ijara is based on a “lease-to-own” concept and is interest-free making it compliant with the Riba provision of Shariah. In an Ijara based transaction, you identify the property you wish to buy and agree to the purchase price with the seller. The bank enters into a “Promise to Purchase” agreement with you for an amount equal to the original purchase price and purchases the property. At the same time, you enter into a lease agreement with the bank which details your rights to occupy the property. You make monthly payments to the bank and a portion of the payment is applied toward the purchase of the property with the remainder paid to the bank as rent. Once the purchase price is paid in full, rental payments cease and ownership of the property is transferred to you.

Musharaka is based on a “shared ownership” concept. In a Musharaka based mortgage transaction, you identify the property you wish to buy and agree to a purchase price with the seller. The bank buys the property and leases it to you (similiar to Ijara). Your first payment is your initial contribution (deposit), in a Musharaka arrangement this amount will become your initial `Share` of the property. As the mortgage term progresses, the capital portion of your monthly repayment to the bank will add to your percentage share of the property. When you make your last payment at the end of the mortgage term, you would have purchased 100% share of your home.

Using the Islamic Finance concepts of Ijara or Musharaka, you now have a choice of faith-based mortgage options enabling you to purchase a home or refinance a conventional mortgage through a Halal mortgage which is Riba free and; therefore, Shariah compliant