How Does Guidance Islamic Home Financing Works?

How Does Guidance Residential Islamic Home Financing Program Works?

So my name is adisa – if i was guidance residential here instead of washington i will talk about guidance residential and islamic finance in general and chawla so i will start with the quran i am so not matter he levine a afternoon every ballet a hormonal a cameo for lady hogbottom she oh i mean miss then he could be in the midway or mr. reba wahala will be a

Muharram ariba this is from quran chapter 2 verse 275 those who take unlawful interest with stand before god on the day of judgment those whose mind has been corrupted by the influence of shaitaan they say that commerce is just like interest but god has made harm is lawful and has forbidden interest so the goal for guidance residential is to make muslim americans

The homeowner achieve the american dream the holloway there’s a huge need out there a lot of muslims qualified to purchase a home has been renting for long time something like a guy dance residential came up with the solution to be a compliant with the us law in islamic law as well so amazingly actually at other abrahamic faiths like judaism and christianity have

The same view on reba sadly is not practiced today founding father of this country as well had a negative view of usury or be bad for example john adams says there are two ways to conquer and enslave a nation one is by sword others by date thomas jefferson say i believe their banking institution are more dangerous to our liberties than a standing army so inshallah

Having said that a little bit of arriba guidance residential established in 1999 with multi-million dollar research and development that involved six of the world leading islamic scholars on islamic finance and we launched in 2002 in three states alhamdulillah in 2009 when the market was crashing with the financial market was crashing guidance residential actually

We had our one of our best year we were recognized by by a lot of media’s and 2015 mj assembly of muslim youth of america they actually gave us endorsements after one year research they say guidance residential it’s the only islamic finance that is actually approved by mj today we are more than 30 states we’re more 30 state that hamdulillah we helped more than

5 billion dollar islamic financing and about 24,000 muslim americans to be became home when i was through our program so guidance residential is a part of much larger corporation called cap capital guidance which is owned by dr. mohammed hammer he’s a sole owner of the whole organization so it was founded 50 years ago capital guidance by families from middle east

Today were built in dc the capital guidance and capital guidance actually have offices 7 7 always are in 27 countries having different kind of business sectors i don’t spend a lot of time on capital guidance i will talk about how guidance residential works today we are in more and more than 30 states hamdulillah and our program is actually a declining balance

Co-ownership contract which i’ll come to in to detail and explain to you how it works so this side of the state that we actually licensed myself i’m licensed in washington and oregon but we have about 30 states that guidance operates so we have a we’re the only islamic finance company actually that had independent sharia board who supervised our transactions the

Very famous one is dr. justice muhammad taught us money is it justice in pakistan is that if the person actually that’s called a father of islamic finance and in this year actually he was the number one muslim influential around the world muhammad of this money he actually wrote our contract the chairman of our sharia board also muhammad ali’s money actually is

A chairman of ioc i always accounting and auditing organisation of islamic finance this is an international nonprofit organization that actually audits all islamic finance lamech banking around the world so how much appears money is the chairman of guidance for the award and also he the chairman of a lot of banks islamic banks around the world our fatah was are

Available for public online available in sharla so i’m joe as i mentioned earlier i’m jay actually as assembly of muslim ghosts of america building and texas the issue that i was on it since lama kish was there is slamming home financing whether stood alone where there’s a marriage every year the issue fatwa inshaallah on the website we very happy to share with

You the inch their way website that clearly state that guidance residential is the own islamic finance that is truly shariah compliant in the united state so i didn’t say that about guidance our communities now so i realize how long but there’s a lot of misunderstanding even what is three bites off so reba is our interest is a profit made from lending a bottom

Transaction in islam money has no intrinsic value money the means of exchange is not accept of islam so what is permissible in islam long with our prophet called charity trading is permissible buying and selling is permissible so in the united state there’s three mitad the message of islamic financing murabba ha which is purchased at resale each ara leads to own

Called mushara cat the most famous one or partnership which is the guidance residential practices melodica itself i was to part which is asset ownership shaker to the milk business venture shake at the lab currently guidance residential we only doing sugar to milk which is asset ownership the goal is here for guidance residential to make muslim americans homeowners

Not as a business so much armored car compared to morale behind each auto has the benefits so the major benefits that underlies approved by independent early abroad in a nasty well other islamic financing methods are not actually approved in the united state for mortgage as the nura coast commitment in case of default or guidance residential would not pursue the

Home buyer for any recourse it means that if the home buyer defaulted guidance would not pursue them for any judgment this is benefit of majolica another benefit is no prepayment penalty if the home buyer or the customer want to pay in advance guidance residential will not charge any penalty for that let’s say the contract was thirty years and the home buyer wanted

To buy the house in five years they can do so with no any restriction whatsoever other one very important clause is risk shared risky the only is only the only islamic finance or any banking in the united states that that is guidance residential in case of natural disaster or eminent domain residential will share the risk of monetary loss with the homebuyer let

Payments as well is fixed to $50 it would never compound like conventional let’s say the homebuyer is late for four months we just paid $200 and would be back to the contract with conventional what happens is every month interest rates compound and compound and the homebuyer doesn’t even know how much he owns by the time he actually foreclose on the property chala

So our contract is called declining balance co-ownership which means i will give an example let’s say the house was hundred thousand dollar so the home bought the homeowner kim was let’s say 20 20 thousand down payments which is 20 percent right the home but owner would own 20% guidance would own 80 percent so every month our share declines the home owners share

Increase until you press on higher would be out i will go into detail and sharla explain what’s what that in detail so i have a diagram here explaining the relationship between the home buyer and guidance and the relationship between a bank and a buyer here with guidance residential the buyer and guidance residential ugly sunako ownership contract you’re the buyer

We are the co-owner here the mortgage loan you’re the buyer the bank is a lender and you agree on interest rates you borrow money from the bank buy the house your ownership is hundred percent here since actually you borrowed money from the bank and bought it with guidance your ownership is your down payments let’s say this example 30 percent down payment will buy

You 30 percent share in the house 70 percent share is on buy guidance which means 70 percent of the risk is on buy guidance residential islam you cannot sell something without taking risk you cannot make a profit unless you incur risk ownership bring a risk banks here they have no ownership whatsoever in the house you own the house anything that comes with the

House and your problem you pay back the loan at the time goes your share goes up with guidance residential every month when you make a payments part of the payment will go to guidance of the practices we own the property and part of it goes to the house to make the payment every month to increase your share so eventually you become a hundred percent owner here with

Guidance here with the loan with the loan contract you pay off the bank the amount plus interest eventually pay off the moon that’s what makes a different charla so here guidance residential to summarize it is a co-ownership contract banks know they don’t do a corner ship at the islamic bank no they don’t do co-ownership our contract is deliver free since there is

No any loan transaction there is no reba guidance residential of course there is no reba other banks yes of course and other islamic bank as well yes with some with some conditions not be cost commitment again yes guidance residential doesn’t have an early cost commitment kids of default we don’t come after you late payments are kept with guidance yes which banks

Is gonna compound risk sharing again this is the only thing the only clothes that’s done by guidance residential no prevalent faulty if you want to own the house help in advance you can do throw with no restriction whatsoever guidance residential is not affiliated with any bank we actually we we not related to bank we not affiliated with bank we don’t bring money

From the bank we’re actually muslim-owned organization how contract the equity partnership yes banks is a loan transaction endorsed by mj yes guidance is endorsed by mj a depends and not i will summarize it for you again guidance residential is a common issue contract where the home buyer and guidance residential buy the property together and every month when the

Home buyer makes money makes a payment will buy a share of them from guidance residential there’s no ribbon vote since there is no loan transaction a scenario cost commitment again late payments will never compound a conventional loan we have l homme de la independencia board who supervise our contract with is led by muhammad devil’s mani handle away endorsed by

Mgm in 2015 risk sharing as well in case of natural disaster any loss guidance will share risk with with the home buyer no prepayment penalty you want to buy the house in advance you can do that we’re not affiliated with any bank most other islamic banks actually they are owned by a bank a subsidiary of a bank and the open islamic islamic finance window guidance

Is different hamdullah that’s why we have about 90 percent of the market share of islamic violence so i would like i will give you a schedule payment example huh guidance residential work this is any scenario this is a while ago the rates were higher than the rate out down right now for example this one $100,000 contract amounts for 15 years term with 180 payments

The property it was 3.75 so with that this is howard structure for example the home buyer on 20% when it started every month they make payments your share goes up here from twenty twenty percent twenty one percent twenty four twenty eight until you become a hundred person owner our balance declines every month our profits every time your share goes up your ownership

Inquiries our profit declines as well from three hundred three hundred eleven two hundred ninety two to eight until it’s zero this is how in structured inshallah so when you share goes up our profit declines so this is a charla just i want to summarize for you with one one slides here sorry about that i hope you can see this so this is what makes guidance residential

Different to conventional or as islamic finance i want to summarize it for you with this one so coalition contract there is no other islamic finance or bank that’s co-ownership contract hamdullah guidance is a shariah compliant contracts is called co-ownership or moshe erica al madonna festa risk-sharing yes reaper free since there was no more there is no reaper

Involved no prepayment penalties guidance late payments there is no late payments compounded like conventional bank no recourse commitment independent shariah border hamdullah and endorsed by anja which actually is available on their website i will share with you the link later so we provide at 30 years 20 and 15 years contracts purchase contract or refinance if

You have a currently with a conventional bank you can refinance to guidance residential as well so the process is the first step abdul rahman talked about it a little bit but i want to summarize it here the first step is to prequalify means we just get a basic information about your property your credit score your income and your down payments then you provide

The documents you get a pre-approval if you want to go out and put an offer without that man to put an offer on for the seller to take you seriously you need to have a pre-approval letter pre-approval means we have to take complete application get your document your tax return w2 space tops and get you pre-approved once you have a pre-approval is as good as a

Cash offer then once you have approval you start start searching for home you put an offer then as a black man talked about earlier you maintain your financial profile until it closed in the house then within 30 days we can close for you and get you a key shalala so the first step is of course to get a pre-qualification pre-approval you connect with me i handle

I’m one of the renzetti be here in washington state you connect with me we’ll start the process and see how much you could qualify so the three major criteria for us to get to get you approved one we look at income you have to be employed or self employed the last two years we look at your used to date paste up we look at your debt-to-income means like all your

Liabilities divided by your income including the new mortgage that you buy in and a credit report minimum query report guidance residential be x 30 620 and of course the bank statements your bank has to be your your money for the down payment money has to be an account at least for 30 days seasoned and the minimum downpayment whose guidance residential we have a 3%

With first-time homebuyer program we also have introduced actually new program if someone can qualify for it up to 2500 credits for a down payment you said the documents required it’s really we just go up over it we look at 30 days pay stop double use tax return last 2 years 2 months bank statement or stocks and if you self-employed we need a complete bank tax

Return with the complete schedules i i don’t want to go over the home benefit of homeownership mashaallah so this is a again mohammed affects money this is the journalist he came hamitic is managed li the first the most influential muslim around the world is 2020 he actually is the chairman of our contract your oral contract as well this is my presentations are

Like if you have any question this is our office here in dance in tukwila you have any questions allah will take it from there john thank you so much you

Transcribed from video
How Does Guidance Islamic Home Financing Works? By Islamic Home Financing – Abdisa Tufa – Guidance WA