Reply to: Sharia student account

[AtW]

Sharia mortages are more expensive.

That's probably racist...

[lilelvis2000]

Is there is an advantage, then can you picture all the infidel folk (eg. property developers) lining up at the City branch of the Islamic bank clutching their copy of the relevant discrimination legislation.

I don't see anywhere where "only muslims allowed" is mentioned. As Chrisitians also beleive interest is wrong - I'm sure many would be interested. I read an analysis back once in the guardian - Sharia mortages are more expensive. Ironically under FSA rules they have to supply a %rate for comparison basis. It is higher than other banks.

[Joe Black]

Yep, one virgin for every pound, or should that be kilogram, of flesh apparently.

[AtW]

LTSB gets commission from Allah for every account signed up...

[darmstadt]

Bunch of old tosh really, from the website:

We welcome customers who are not of Muslim faith to apply for a Lloyds TSB Islamic Student account.

Roll on up David Ibrahaim...

[oraclesmith]

Is there is an advantage, then can you picture all the infidel folk (eg. property developers) lining up at the City branch of the Islamic bank clutching their copy of the relevant discrimination legislation.

[Troll]

"Cast terror into the hearts of the infidels. Strike off their heads. Strike off even the tips of their fingers!" (Sura 8:12).
"Fighting is obligatory for you Muslims." (Sura 2:216).
"And if you shall be slain or die on the path of God, then pardon from God and mercy is better than all your amassings; For if you die or be slain, verily unto God shall you be gathered." (Sura 3:151,2).
"Verily, the infidels are your undoubted enemies!" (Sura 4:102).
"Believers! wage war against such of the infidels as are your neighbors, and let them find you rigorous." (Sura 9:124).
"Give not way therefore to the Infidels, but by means of this Koran strive against them with a mighty strife." (Sura 25:54).
"Those who resist Allah and His Messenger will be crumbled to dust, as were those before them: for we have already sent down Clear Signs and the Unbelievers will have a humiliating Penalty." (Sura 58:5).
"Those who reject faith (Islam) and belie our signs. They shall be Companions of the Fire and abide in it." (Sura 2:39).
"The Curse of Allah is on those without faith (in Islam). Thus have they drawn wrath upon wrath on themselves and humiliating is the punishment of those who reject faith (Islam)." (Sura 2:89-90).
"The Punishment for those who oppose Allah and his messenger is: Execution or Crucifixion or the cutting off of hands and feet from opposite sides or exile from the land." (Sura 5:33).
"If you do not fight, He Allah will punish you sternly, and replace you by other men." (Sura 9:39)'.
"The curse of God on the infidels!" (Sura 2:83).
"Let not believers take infidels for their friends rather than believers: who so shall do this has nothing to hope from God." (Sura 3:27).

[oraclesmith]

If there is any fiscal advantage in going with an Islamic style of financing as opposed to the regular UK style, then presumably they couldn't legally refuse you because you're not actually Islamic as surely that would be illegal. Might be one for the IFA's ?

[hyperD]

It looks like the usual Lloyds practice: offer a zero percent interest rate account, call it an Islamic account and then use aggressive charges when the account goes overdrawn.

http://www.lloydstsb.com/rates_and_c...es.asp#islamic

Better off going to the authentic Islamic banks:

http://www.islamic-bank.com/islamicb...ome/1/Home.jsp

Instead of Interest rates, I just love the way they call it Prophet rates (only kidding, profit)

[oraclesmith]

Agreed. Presumably, when the bank owns more than 50% of the equity, it can decide whether to sell or not. If it owns less than 50%, they you decide, but even in a worse-case scenario, the house would have had to have lost half its value by this point for the bank to show a nominal "loss" on the deal. Bear in mind, you have been paying them rental or interest (whatever you want to call it) as well.

Oooh. That means that you haven't got any real control over the property for about 8-10 years ? What if you wanted to quit the property ladder for reasons other than financial ones ? What if you wanted to rent it out when you only own 10% ? What about all the regulations/legislation relating to property owners ?

[AtW]

The effective interest rate that they don't say ought to be much higher than normally, that's why banks are happy to comply with Sharia law. I bet bank managers doing these are not women in short skirts either...

[Fleetwood]

Ok. In the first example, they can't actually sell it to you as you haven't got the £200k. They must be transferring ownership of the house to you and agreeing a fixed rate loan which is secured on the property. So if you sell it for £400k, then you can pay back your loan of £200k. And if you sell it for £100k, then you still owe the bank the other £100k. That works OK.

They are lending you 200K, without interest, secured on the property you have just bought,whose value when purchased was 150K.

But the second example is a gradual transfer of equity from one party to the other. At any one point in time, you could choose/ask-the-bank to sell the house and presumably jointly take a profit or a loss - unless the bank's only interest is the original purchase price in which case the profit/loss would be all yours.

For example, say you make a bad investment and have to sell at a loss. With a shared ownership basis, you may only be liable for 10% with the bank taking the 90%, assuming the bank allows you to sell up in the first place. In which case there is a wonderful opportunity for fraud.

Agreed. Presumably, when the bank owns more than 50% of the equity, it can decide whether to sell or not. If it owns less than 50%, they you decide, but even in a worse-case scenario, the house would have had to have lost half its value by this point for the bank to show a nominal "loss" on the deal. Bear in mind, you have been paying them rental or interest (whatever you want to call it) as well.

[oraclesmith]

Most I've seen is 10 year fixed rate with the Nationwide.

[AtW]

But do banks actually offer fixed rate morgage for the whole period, without such rate very high to hedge their risks?

[oraclesmith]

Ok. In the first example, they can't actually sell it to you as you haven't got the £200k. They must be transferring ownership of the house to you and agreeing a fixed rate loan which is secured on the property. So if you sell it for £400k, then you can pay back your loan of £200k. And if you sell it for £100k, then you still owe the bank the other £100k. That works OK.

But the second example is a gradual transfer of equity from one party to the other. At any one point in time, you could choose/ask-the-bank to sell the house and presumably jointly take a profit or a loss - unless the bank's only interest is the original purchase price in which case the profit/loss would be all yours.

For example, say you make a bad investment and have to sell at a loss. With a shared ownership basis, you may only be liable for 10% with the bank taking the 90%, assuming the bank allows you to sell up in the first place. In which case there is a wonderful opportunity for fraud.