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Our partners include some of the largest financial institutions in the UAE. Similarly, in the case of a natural disaster or eminent domain which is when the government seizes part or all of a property for public use , losses are yours to bear alone.
Islamic financing does not compound late payment or prepayment fees. Islamic finance providers aim to keep the entire home financing process Shariah-compliant, and therefore, will not compound late payment fees like conventional home loan providers sometimes do. Instead, Islamic financiers charge a fixed fee that covers the late payment fee expense and does not serve as a means for profit. Additionally, conventional home loan providers sometimes charge a prepayment penalty to buyers who want to pay ahead of the agreed timelines, while Islamic finance providers do not.
Islamic financing shares the risk with the buyer. One of the unique components of Islamic finance is the co-owner or partnership program. Islamic financing providers share the risks with the buyer since they act as a co-owner or partner. In the case of a foreclosure, for example, Islamic financing providers do not receive more than the sale price of the house, whereas the lender in a traditional mortgage will expect to be paid in full regardless of the price the home ultimately sells for.
Conventional home loan providers also do not share the risk of natural disasters, eminent domain or foreclosure. Through this type of financing, the home buyer bears the brunt if any of these misfortunes occur. Learn more about how FutureLearn is transforming access to education. Learn more about this course. How does Islamic finance differ from conventional finance?
Prof Laurence Harris provides further detail on the principles and features of Islamic finance in this article to accompany his video presentation. Share this post. Suitable course 10 Nov, There were good explanations of the concepts and terminology in Visit the course.
Excellent learning experience 28 Oct, Excellent learning experience. Best Learning Experience 13 Oct, Just Awesome. It was great. Yes, it was really appropriate 11 Sep, Yes, it was really appropriate and the content was excellent.
Excellent 29 Jun, I really enjoyed the Risk 09 Jun, It was It was such a beneficial course for me. Yes, it was really appropriate 09 Nov, The main difference between Islamic and conventional finance is the treatment of risk, and how risk is shared.
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