Ijarah
Ijarah, a Islamic Fiqh term literally means “To rent out something”. Ijarah applies to two scenarios where one could be hiring someone for a wage to do a work or to rent out an asset or property in exchange for a payment. Ijarah mode of financing is widely used as an Islamic means for leasing. Islamic Shariah allowsrental of a physical item backed by a Shariah compliant contract.
Ijarah Financing
Ijarah, a Islamic Fiqh term literally means “To rent out something”. Ijarah mode of financing is widely used as an Islamic means for leasing.
- Ijarah financing is a “rent to own” sale of the property to the Crescent Coop renter customer
- Potential renter identifies the home your liking, Crescent Coop purchases on renter’s behalf
- Renter negotiates the price and other aspects of the purchase
- Make an initial payment of earnest money to reserve the home
- Crescent Coop purchases the property and places ownership in a holding entity
- Renter agrees to purchase the property over time
Ijarah Financing
- Full ownership of the property is transferred to the renter after the renter pays the money owed on the property over time.
- Renter pays rent of the property used according to the current market rate
- Renter may choose the rental adjustment period, monthly rental payment can be based on the period chosen by the renter
This product is very flexible, but is more complex and has some additional costs to establish and maintain the arrangement. The payments you make will be very similar to those that you would make on a conventional adjustable-rate mortgage.
