Question Summary:
I live in Newyork and i would like to know if i can borrow loan from a bank to buy house ?

Question Detail:

I live in Newyork and i would like to know if i can borrow loan from a bank to buy house as you know bank will engage me in interest (riba) transaction which i know it's forbidden in Islam, but my question is can I borrow loan on interest as it's hard to buy house on cash in western world or america. Please help me regarding this matter as per shariah.Please do answer my question as i am ready to buy but i just want to know first what shariah say about it. I don't wanna do anything which shariah forbids me.

Answer :

Assalāmu `alaikum Warahmatullāhi Wabrakatuh,
Alhamdulillah you know interest is haraam (strictly prohibited).It is also encouraging to know that you do not wish to do anything against shariah.If you wish to purchase a house through a shariah conventional bank, the only way the conventional bank does’t is by giving you an interest bearing loan. This is not permissible. You rather continue renting instead of purchasing a house and involving yourself in the sin of paying interest.
Some people may feel that renting a house is not economically feasible, as one may pay even a higher rental than a monthly installment and yet not own a house. Rather pay a monthly installment which may be relatively lesser than monthly rental and finally own a house. While this may make perfect economic sense, the issue is at what cost? To rent a house and pay a rental is permissible. To take an interest bearing loan is haraam. Consider at what cost a person will own a house. He will be involving himself in haraam and invite the wrath and anger of Allah Ta’ala.Where will the barakah be in the house?
Will a conscious Muslim purchasing a house to attain peace overlook the main source of peace, blessings and Baraka from Allah Ta’ala?.
One may eventually own a house after 20/25 years of paying the interest bearing loan but can one safely say he had peace at that time? The ups and down of the economic climate with the soaring of interest rates is of grave concern. Will I still be employed? Will I be earning enough to pay the loan? Will the house which I toiled so hard for be repossessed? Even if one escapes all these challenges and successfully paid the loan and secured the house, what guarantee does one have that the haraam transaction will not hurt one in other aspects of his life?
Interest is haraam and is the clear decree of Almighty Allah. The Al-Hakeem (the All Wise).
The true wisdom behind the prohibition of interest is best known to Allah alone. As believers we trust the wisdom of Allah and simply submit.
This does not mean we should not consider economic viability and dealing accordingly. However the overriding principle should be is it shariah compliant or not?
In your case as a resident of USA you should consider getting your house financed through a shariah compliant finance scheme. I believe there are some companies offering such a service. You should contact us again for clarity on the shariah compliance of the scheme.
And Allah Ta'ala Knows Best,
Muftī Ebrahim Desai
Daruliftaa
35 Candella Rd, Durban, South Africa
www.daruliftaa.net