Islamic Remortgages for Muslims
With Muslim or Islamic remortgages the Islamic remortgage lender will buy the property on behalf of the client - often contributing up to 90 per cent of the purchase price of the property.
The customer then pays the remaining percentage upfront (like a deposit) and repays the outstanding amount over the pre-agreed term.
Strangely until April 6th 2007 Islamic Remortgages escaped traditional mortgage regulations by the FSA. Which meant that people taking out Islamic remortgages failed to be protected from the unregulated and often unscrupulous sales practices surrounding these products, meaning that they had no automatic right to compensation if they were miss-sold an Islamic Remortgage.
Modern day regulations ensure that all Islamic Remortgage Providers Must:
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Be fit and proper, appropriately resourced with the skilled staff competent to undertake the financial business.
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Consumers should get good quality advice and be sold suitable products which take their circumstances and needs in to account.
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All consumers should get clear, concise and consistent information about a firm's services and products on offer, including appropriate risk warnings so they can make the most informed choices.
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If things go wrong, consumers are able to obtain redress, if appropriate.
The new rules applied to Islamic Remortgages, also apply to the musharaka method of Islamic remortgaging. The other way of buying a home acceptable under Islamic law is the murabaha, which has been regulated since October 2004 under the mortgage regime.