There have been growing options for Muslims seeking to find less risky ways to obtain property.  A conventional mortgage has not been an option that could be used due to the Sharia Law of Islam, which prohibits the ideas behind the standard definition of interest in regards to loans.  Since it is often hard if not impossible for many Islamic families to simply buy a house with cash, an Islamic mortgage has become an option that provides more security to property purchases and has be designed to not break the Sharia Law.

You may be wondering how are Islamic mortgages possible since interest is what makes a loan beneficial for the lending financial institution.  It simply requires a few adjustments in how the agreement and actual exchange of money is completed.  One way that these mortgages are achieved is by the bank selling the property at a higher total amount at a zero percent interest rate.  A second option is what many of us know as a rent to own option.  This is where a renter makes monthly payments towards the property equity until enough payments have been received to pay off the property.  At that point, the property title is transferred from the bank to the renter.

The final and slightly more complicated option is to make a joint partnership between the bank and purchaser.  This involves creating an LLC in which each party will own a portion of the property, typically referred to as shares.  This allows for the "shares" to shift percentages until the individual who wants to own the property has accumulated all the shares of the property.

While these options are typically a little different, they still offer security to both the buyer and the lender.  It simply takes the mortgage concept and removes the interest variable.  This masterful mortgage has made it possible for Muslims to have the same property investment options as everyone else.