Islamic finance is the means by which corporations and individuals in the Muslim world raise capital in accordance with Sharia Law, which forbids the accrual of interest on monies borrowed.
How does Islaminc Finance Work?
In many ways, the structure of Islamic Finance makes a lot more practical sense than a typical “high street” mortgage, where the land is charged to the lender as security for the loan.
In the context of Property Finance (whether you are purchasing or re-mortgaging your property to live in, or as a Buy to Let investment), transactions are typically structured under the principle of Diminishing Musharaka, where the legal title to the property is transferred to the Bank and the equitable title to the property is co-owned by the Bank and the customer (in the proportions paid by the parties for the property).
The Bank then let the property back to the customer giving them exclusive possession of the property during the term of the agreement.
Monthly payments to the bank are then made up of two limbs:
- An “acquisition” payment, where the customer increases its share in the equity of the property
- A “rental” payment, that the customer pays to the bank under the lease.
When all of the acquisition payments have been made, the customer will own 100% of the equity in the property , and the Bank will subsequently transfer the Legal Title of the property to the customer.
Diminishing Musharaka mortgages require specialist knowledge as they are unlike typical “high street” mortgages. If you are looking to acquire or refinance a property using Islamic Finance, you need the right solicitor in your corner and should not countenance using a firm that has not been through the process before.
Why choose Attwells?
For Our Speed and Diligence: In a competitive market the speed and diligence of your lawyer is key. With Attwells, you can rest assured that no matter what the transaction entails, your lawyers will be proactive in pushing your matter forward to an efficient and satisfactory conclusion.
For Our Competitive Fixed Fees: Attwells are offer competitive fixed fees on all of our Property Finance services, so that from day one, you will know how much your legal costs will affect your bottom line. This is all part of our commitment to transparent and fair pricing For Our Proactive Communication Is there anything more frustrating than not knowing the status of your matter? Or worse still, not being able to get in contact with your lawyer for an answer? At Attwells we understand that communication with the client and their professional team is critical , which is why we will give you regular updates without being prompted. You will always be given the direct line to your lawyer, so you can spend your day running your business, rather than waiting on hold.
We use cutting edge Case Management Software to ensure that staff absences (either through holiday or unplanned) are always covered by colleagues within the department, so you can be sure that your matter will not be delayed by matters outside of your control.
For Our Expertise: There are not many English law firms capable or willing to undertake Islamic Mortgages at reasonable fees. We have considerable experience in acting on such matters and as with any other of our service, we are able to offer fixed and fair fees for the work we undertake.