While Islamic banks differ from commercial banks based on how they structure their home loans, they are similar in the sense that they still ask you to submit documents and comply with requirements when applying for a mortgage. Before you apply for an Islamic home loan, check out the following qualifications Islamic banks look for in a halal mortgage homebuyer.
To qualify for a Shariah-compliant home purchase plan, Islamic banks will check your employment status to assess if you are financially capable of covering your monthly halal mortgage payments. The chances of a halal housing loan application getting approved are much better for regular employees with stable income.
When applying for a halal mortgage, you will be required to submit bank statements and other documents to show your financial assets. This includes mutual funds, money market accounts, and properties you own. This helps them evaluate your current personal financial liquidity that can aid you in paying off your Shariah-compliant home loan installments.
Islamic banks examine your credit risk by checking your existing monetary obligations to other people or financial institutions, such as car loans, credit cards, child support, alimony, or other mortgages you are currently paying off. A high debt-to-income (DTI) ratio increases your credit risk for them since you have too many financial obligations for the level of income you earn.
Your credit score plays an essential role in your halal home loan application as it helps Islamic banks to evaluate your character as a borrower. Maintain an excellent credit score or at least keep it at an acceptable range to give Islamic financing specialists an idea of how well you manage your financial liabilities.
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For a lower monthly installment on your halal mortgage, it might be possible to increase the amount of your down payment. The most ideal down payment for a house financing plan is said to be around 20% in order to receive better rates. Otherwise, you may find other Islamic banks that accept down payments lower than 20%.
If you’re looking for a reputable financial institution that offers halal mortgage, look no further than here at Devon Bank Our Islamic financing professionals are known for their excellent customer service and expertise; they will guide you every step of the way to help you gain ownership of your dream home. Contact us today to connect with our Islamic financing specialists and get pre-qualified.