Specifically it offers Murabaha mortgage loans, which are Shariah compliant.
Basically the interest is just pegged into the transaction as a fake sell price for the house. I found this info on another website:
This isn't totally new to the U.S. market. I first blogged about this stuff in July of 2002.How it works
- You identify the property you wish to buy and agree the purchase price with the seller of the property in the normal way.
- You approach us for assistance and complete an application form (see section ‘do I qualify’).
- If we are able to help, the bank will buy the property, after solicitors confirmed that everything is in order, and immediately sell it to you at a higher price.
- The higher price is calculated depending on the value of the property, the number of years you wish to pay us over and the amount of your first payment (see ‘payment calculator’ for an indication of the higher price).
- When purchased, the property is registered in your name and the sale between yourself and the bank is recorded in the Murabaha Contract.
- Your first payment to the bank is made on the day of completion and is your initial contribution, normally a minimum of 17% of the purchase price.
I'd hate to be late on that payment, amputation or stoned to death.