What is the Mortgage in Islam?

Mr Manager of a bank a few days ago – What is the provision of a mortgage in Islam? Asked a question to this effect.

There were some more relevant issues involved with his question. To give written answers to the questions,

I have to study the details of the subject and walk on the path of pure understanding.

There I came up with a number of unique and integrated solutions to mortgage in Islam. I am analytical of that question for the readers to gain accurate and pure knowledge Serving the answer.

We hope that all readers who are interested in gaining knowledge about mortgages in Islam will benefit from reading this article.

What does mortgage mean in Islam?

The Arabic synonym for a mortgage is – “Rehen”, which means to keep something closed.

In Islamic terminology, a thing is called a mortgage To keep a bond instead of a receipt, so that in return one can get one’s due.

Mortgages are usually mortgaged to secure a loan. The lender is assured that if the debt is not repaid,

The lender will sell the mortgaged property or for its own needs. You can use it to collect his dues.

Where the borrower promises to repay the loan on time as well as to protect or breach it resulting in financial loss. It is his responsibility to pay off his mortgage.

The Mortgage in Quran

In the Holy Quran, Allah Ta’ala says about mortgages –

{إن كنتم على سفر ولم تجدوا كاتبا فرهان مقبوضة}

Translation: “If you are on a tour, in which case (like writing a contract) you do not find an author, then mortgage something (lend it to the lender).” (Surat al-Baqara, 273)

Aisha (may Allah be pleased with her) narrated,

أن النبي صلى الله عليه و سلم اشترى من يهودي طعاما إلى أجل ورهنه درعه

Translation: The Prophet (peace and blessings of Allah be upon him) bought some food from a Jew and left his armour with the Jew as collateral. (Sahih Bukhari, 2374)

Although in the verses of the Holy Qur’an there is an instructive word which means to keep a mortgage, the scholars have taken this instruction as an indicator of advice.

In this way, even though the verse says that it is permissible to keep a mortgage during the journey,

it is permissible for the ulama to say that it is permissible to keep a mortgage while staying at one’s place of residence.

What is the provision of the mortgage in Islam?

Mortgages are Halal in Islam; However, in this case, the Shariah principles must be followed.

Understand what is meant by the mortgage system in Islam? So you have to give or take a mortgage from within the Shariah boundary line.

A mortgage system is allowed in Islam; However, in this case, the Shariah principles must be followed.

Understand what is meant by the mortgage system in Islam? So you have to give or take a mortgage from within the Shariah boundary line.

Evidence from the Qur’an and Hadith shows that the recipient of money in economic transactions has recognized Islam as a means of protecting his money from loss.

Imam Nawabi (may Allah have mercy on him) said about the interpretation of the above hadith –

‘The hadith proves the validity of the mortgage. Even the legitimacy of mortgaging arms to the infidels is proved. This is the accepted opinion of the four schools. “

Not only that, but every pledge where there is a possibility of financial loss is also legal to mortgage something. Such as purchase and sale pledges etc.

When a buyer promises to buy a product, the buyer has no difficulty in mortgaging anything.

So that the seller can be assured that the promise will be kept. Or if he breaks his promise, he can sell the mortgage to cover his financial loss.

Referring to the opinion adopted by the jurists on the basis of this argument, it is stated in the book ‘Al Mausuatul Fiqhiyatul Kuitiyya’ –

“Fiqh scholars are unanimous that it is permissible to take a mortgage as a guarantee of usurpation of any (financial) dues which may or may not necessarily be levied on one’s opponent.”

(Al-Mawsuatul Fiqhiyatul Quitiyyah, b. 23, p. 16)

Is it legal to take advantage of mortgages?

We understand from the above discussion that a mortgage is legal in Islam. But the question remains whether using mortgage items to benefit Will be valid or not?

Benefiting from a mortgage, such as cultivating land and reaping a crop or renting a house or riding a car.
Not valid.

Because after giving a loan to someone, the mortgage is kept to guarantee the repayment of that loan. It is not paid for use.

Now if the mortgagee (lender) starts to benefit, it means that he is benefiting from the loan. And Fukahaye Keram considers taking all kinds of benefits in return for the loan as interest.

However, the mortgagee can enjoy the crop of the land by paying the lease price to the owner of the land.

Its nature is – land ownership at the prevailing rate in the society lease price on his land will be recovered from the mortgagor or deducted from his debt.

In this case, it is important to note that the lease price that the owner of the land will pay should not be just a name.

The lease price of similar land is in the society The lease price should be taken in proportion to the prevailing rate.

GOD is fully aware of whether a person obeys God’s laws or seeks to escape them.

Bai al-Wafa is often referred to as another way to legalize mortgage crops. By Al Wafa, At first, there will be no discussion of loans or mortgages.

Instead, the land will be sold at a fixed price in such a way that when the seller returns the price to the buyer,

The buyer will return the land to the seller again.

Mortgage in Islam Hanafi

Fukahaye Keram has strongly disagreed with whether this approach is valid or not. The Hanafi ulama themselves have narrated some contradictory opinions from Keram.

In al-Majma al-Fiqh al-Islami, al-Wafa has been ruled as haram.

Although there is a difference in the name, the reality is the benefit in exchange for the loan Being enjoyed, which is of interest.

Some Fuqaha’i Keram say that if the offer is not conditional at the beginning of the contract but the buyer promises himself at the end of the contract that,

Whenever the seller brings the price, he will sell it to the seller through a new contract, then it will be valid.

But it is far more difficult to justify their existence than to refer to them as such.

How many people will be found who, after purchasing land, will voluntarily return the land to the seller at the previous price?

And if the promise is made, is it obligatory to fulfil that promise? Most of the Hanafi madhhabs do not consider it obligatory to fulfil the fuqaha promise.

Islamic mortgage Hanafi

Moreover, when such a trend is introduced in society, it will be seen that in Bai Al Wafa,

The seller will want the buyer to promise and the buyer will also promise.

So that he can get the land and enjoy the benefits. The seller will not even sell to a buyer who does not promise to return the land.

Therefore, the condition of returning the land at the time of the contract is not mentioned verbally,

But in everyone’s mind, this condition remains as the desired object.

And one of the principles of Fikr is, ‘Al Maruf Fil Urfi Kal Mashrut Indan Aqdi’ i.e.

What is known in the society should be mentioned even if it is not mentioned in the agreement? Will be treated as such.

So even if there is no condition to return the land at the time of the agreement, it will be considered as a condition which will make Bai Al Wafa face.

Who will pay for the mortgage?

Fukahaye Keram agrees to accept the cost of the mortgage. However, the mortgagee will take all the expenses,

There is a difference of opinion between the majority of jurists and the Hanafis as to whether or not the mortgagee has to bear the cost in some cases.

The Prophet (peace and blessings of Allah be upon him) said:

‘Mortgages can’t be swallowed unfairly. The mortgagor will benefit from the mortgage and will bear all the expenses. ‘(Al-Mustadrak Alas Sahihain Lil Hakim, 2315)

There are three commandments in this hadith about mortgages.

The first commandment: is that mortgages cannot be swallowed unjustly.

The second commandment is that only the owner has the right to enjoy the benefits of the mortgage.

For example, if the mortgage is a cow, it is milk, if it is texture, it is a crop,

If it is a house The owner will accept the rent etc.

The third commandment is that the owner must bear all the costs of the mortgage. For example, if the mortgage is a cow, then the grass or the shepherd’s wages,

if the land The cost of retaining its ownership and the cost of handing over the mortgage to the mortgagor in case of immovable property will be borne by the mortgagor.

Therefore, this hadith is becoming a clear document on the mortgagee carrying the legal cost of releasing the mortgage after recovering the cost and dues of the mortgage deed.

Fukahaye Keram’s consensus

Fuqahaye Keram agreed that the cost of the mortgage should be borne by the mortgagor. (Al-Fiqhul Islami and Adillatuhu, b. 6, p. 128)

Note: The Hanafi school of thought has laid down the principles for carrying the cost of a mortgage –

any expense that may be incurred in keeping the mortgage in its place or expenditure on his benefit is borne by the mortgagor.

And the mortgagee will bear all the costs that are incurred in keeping the mortgage.

The mortgage deed, therefore, since the ownership of the mortgaged property is in its condition, that is, the mortgagee’s property needs to be retained,

Therefore, in the light of this principle, the cost of execution of mortgage deeds has to be borne by the mortgagor.

In this way the mortgaged goods are released in the interest of dispossessing the ownership of the goods by paying the dues, therefore the mortgagee has to bear the legal cost.

It can therefore be said that the consensus of the four schools is – To be accepted.

What is the provision for payment of debts by selling mortgages?

It is clear from the verses and hadiths of the Qur’an concerning mortgages that it is permissible to sell the mortgaged goods after the time has elapsed to recover the debt.

As Allah says:

“If you are on a tour, in which case (like writing a contract) you do not find an author, then mortgage something (lend it to the lender).” (Surat al-Baqara, 273)

In a hadith, Aisha (may Allah be pleased with her) narrates:

The Prophet (peace and blessings of Allah be upon him) bought some food from a Jew and left his armour with the Jew as collateral. (Saheeh Bukhari, 2374)

Because the lender sells the mortgage and does not get a chance to recover his debt,

Then there is no money left to keep the mortgage. However, in order to sell it, certain conditions must be met.

Fatwa For a mortgage in Islam

Those conditions are stated in the book Al-Mawsuatul Fiqhiyatul Quitiyyah –

‘After the loan expires, it becomes necessary for the borrower to repay the loan as soon as the lender makes the claim.

Because when it comes time to repay the loan, in fact, repaying the loan is as necessary as the object for which no mortgage has been taken.

If he repays the loan in full, the mortgagee will be released.

But if the full loan or part of it remains unpaid, then the borrower is required to repay the loan by selling

The mortgaged item himself or through his agent with the permission of the required lender. Because the lender’s right is established in the mortgage thing.

And then the borrower will be given priority to recover the loan from the other borrower to whom the thing was mortgaged. Up to this point, all jurists have a consensus.

But if he refuses to repay the loan or sells the mortgage, the judge will order him to repay the loan from his property or by selling the mortgage.

If he persists in his position even after receiving the judge’s order, the judge will kill him by capturing or beating him. If he still does not do so,

the judge himself will sell the mortgage and collect the loan. Because after coming to this state, this is the only way to recover the debt. (Al-Mawsu’atul Fiqhiyat al-Quitiyyah, 26/179)

Is mortgage haram, Mufti Menk

Mr Mufti Manik’s statement about the mortgage

Note: According to the Shafi’i and Hanbali schools of thought, the part which has been discussed in the above discussion after Fuqaha is almost unanimous. In the Maliki and Hanafi schools

Although there is some disagreement in this place, it is only about the judicial process of the judge. Which is related to the Islamic court.

But the Shafi’i and Hanbali schools are more compatible with the current system of justice, so this opinion has been mentioned.

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