How do we purchase a house without a mortgage?

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I’ll start off with the most obvious one :joy: just to be thorough

Save up enough money to buy it outright. Of course I appreciate for most people this just isn’t possible alone

Another obvious but unlikely to be applicable to many is to loan money interest free from close family members - if one has rich family members who are willing to aid

To make this idea sound less ridiculous…

I think Muslims should seriously consider the option of living outside of expensive cities. This won’t be for everyone but it’s increasingly possible now more than ever with the global shift towards remote jobs, that one can consider to conveniently live outside of London for example.

Suddenly one isn’t trying to raise £700,000 for a house anymore for example, and is instead looking at maybe £200,000

People nowadays struggle with housing costs because of:

  1. The price of the first house they aim for
  2. Lack of flexibility with their location
  3. Lack of income to buy a house
  4. Lack of savings to buy a house

To counter (1) sim for a less pricey first house, use the profits from that and then go for a larger house if desired

For (2), as @Khalil said, being flexible with location and working remotely is a also a strategy to employ

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What’s “sim” br Hasan?

Also I haven’t personally done any research into this but I’ve heard many of my friends talk about halal alternatives like primary finance and crowd to live?

I don’t know if they’re halal for sure though or how they actually work

IslamicFinanceGuru explain the Primary Finance method quite in-depth. Apparently it is sharia compliant because it uses the diminishing musharakah structure.

CrowdtoLive is a really good option for Muslims. It’s completely halal. It’s a crowdfunding platform that connects a Champion (the person that wants to raise equity financing) to a pool of Investors. The Champion lives in the property and pays rent on the part they don’t own, and the Investor invests in the property and then gets the rent for the part they own.

Stepladder can help with saving up quicker. It’s a modern twist to the ROSCA concept, also known as 'committee ’ in the south Asian community. You join a circle that fits your saving goal. You all contribute the same amount each month and each month one person is randomly allocated the total. This repeats until everyone gets their deposit. A slight caveat - the platform covers its cost by charging admin fees. This fee depends on your chosen circle but is typically within 2 – 5% of your total savings target.

Doing a committee for £200k might be a difficult haha so if the platform could accommodate, even with the fees, that would be pretty amazing

I heard about a platform yielders which brings together investors for property and shares out the rent as equity I believe.
This could be used to address my point (3) on increasing income

That was a typo. Should’ve been ‘aim’

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Primary finance is really good and in my opinion is the best option for purchasing a home without a mortgage.

An alternative method to buying a home without a mortgage is the committee method. Which is very similar to primary finance, but without the rent feature.

A method that could work is the murabaha model. Re modelled.

We pool investors into the project. Property is bought at a fixed rate return, in monthly installments. The only downside of this model is the creation of debt. a way to off set this, could be the following:

You set up a payment plan for the property valued at X with a 10% fixed rate on top.

X is the value of the property at the time of final payment. X of course is variable. The property is not actually purchased until a full payment is made. If a person wants to pull out or can no longer fulfil the agreement. Their funds will be returned to them.

Jazaki Allahu Khayra.

Which structure does this use? Is it an Ijara structure?

What’s the wait time with these alternatives like? That’s something to consider as well for them viability wise