Agreement In Principle Al Rayan

This is the agreement by which the bank asks you to maintain and insure the property. The goal is to ensure that their secure assets (which they can sell in the event of a default) are maintained on a standard, so as to retain its value. In addition, you must insure the property so that you and the bank are insured for this loss in the event of an unforeseen disaster. With a PPH, i.e. 20 years, IBB and the customer buy the good in common. The customer then has 20 years to purchase the bank stock at the same initial purchase price. This is based on the diminution of the principle of the musharka (decreasing partnership) of Islamic finance. At the time of the conclusion of the joint purchase, the customer will reside in the property, although much of it is owned by the bank. Until the client becomes a full owner, he will rent the part of the property still held by IBB and pay a monthly rent to the bank. This is based on the islamic financing principles of Ijara (leasing).

When all acquisition payments are made and the financing is settled, ownership of the property is fully transferred to the client, and they now own their home entirely without paying interest. According to Sharia principles, the existence of interests creates an unfair relationship between two parties who prefer one over the other; This imbalance can ultimately lead to other negative social and economic impacts, as has been seen in recent years with the failure of several major global banks. This is why it is forbidden in the Koran, because making money from money is easy and useless to earn money, but promotes trade and investment. It is the decisive document that governs the obligations and obligations of each party when the initial purchase of the property and the gradual purchase of the property. It`s separate from the lease. It only covers the cost of acquiring the bank, that is, the initial amount they pay to the seller in addition to your deposit. The Islamic banking system therefore uses various principles recognized as compliant with Sharia law, such as Ijara (leasing), Musharaka (partnership) and Wakala (agency agreement). Islamic banks use these principles to develop Sharia-compliant financial products, such as savings accounts and real estate financing, that enable Muslims to manage their finances in an Islamic way. An Islamic mortgage is an alternative to the traditional Western option, where you borrow money from a lender as a buyer and rem exchange with interest. With a Sharia-compliant home purchase plan, you can be sure that your mortgage is based on the Islamic financial principles of a condominium agreement (Diminishing Musharaka) with leasing (Liara). The basis of all Islamic finances lies in the principles of Sharia, or Islamic law, drawn from the Koran and the example of the Prophet Muhammad (peace be with him). This is the agreement by which the buyer imposes on the property the amounts due to the bank under the DCA and the lease.