Riba (usury), ‘Oh shaykh I want to buy a house I want to get a mortgage and I saw a
video and I was very scared and now I don't know what to do.’
And no, not correct, you can get a loan don't worry inshaAllah.
Riba is in its understanding is loan shark and what Prophet ﷺ wanted for us to be aware
is - loan sharking.
Loan shark is that you enter into a relationship you can never get out of and old loan sharks
it was 10 % per day for example, that you went and borrowed a hundred dollars by the
end of the week you owed a thousand dollars.
You could never get out of that.
It was a form of slavery to enslave somebody into a payment system that they could never
leave and in old days they called ‘A pound of flesh,’ if you didn't pay they came and
they would cut you take parts of your body if you didn't pay the debt.
And the debt was not excusable in your death, that if you died the debt went to your children
and that was completely haram (forbidden) because it was a form of enslaving the nation
and that was what Prophet ﷺ warned us from.
Now the people who push this idea of ‘Riba’ they're probably working for those riba banks
which are ‘Riba banks’ where they come and they say that ‘Okay we'll invest with
you, you put half we put half but pay $3,500 a month rent to us.’
So they're just renaming something of interest and playing some sort of a game, that's all
same as interest and they're probably taking a bigger stake than what they should be taking
for the investment that they put, so that's not the solution.
That they only want to magnify a problem and give a false understanding and solution that
‘Use our system in which we're going to take 50% of your property and you're going
to end up being paying the same amount that if you compared with your bank mortgage.
They're just renaming things and playing tricks with Allah’s (AJ) religion .
So again that's that same madhab (school of islamic law) is putting out that system, that
was like similar to when Bani Israel (Children of Israel) were told by Allah (AJ) that ‘Do
not fish on Shabbat’ and they said ‘Okay Allah (AJ) we won't fish on shabbat,’ they
threw their net onto the ocean then they went and prayed and when they came back the net
was filled with fish.
And Allah (AJ), ‘What are you doing?
You weren't supposed to fish on shabbat.’
Said “No we didn't, we put the net and it caught what it caught” [they replied].Yeah,
people trying to be clever and make people to be scared.
Now look at the modern day banking system that if you go to buy a house and somebody
is going to invest 30 years of time with you and they're going to give you 70 % of the
purchase price and they're only going to charge you 2 to 3% percent, you can't find a single
family member who would do that, who will only take 3% and wait 30 years for you to
pay them back.
That has nothing, nothing, anything like riba, that just sounds like a bad investment because
who's going to sit there for 30 years waiting to get their money back?
The fact that they do that alhamdulillah this is a.. it's a blessing for a nation that has
a system in which to make wealth for people.
That's a bizarre way of people saying, because they've never heard that.
That the immensity of the blessings of America and Canada, I don't know about Europe I don't
think European banks are in that system, they create wealth and opportunity in what they
call ‘The land of the free.’
Their system of how to create wealth for people was based on this, that somebody from nothing
could save a little bit of money and become a landowner and their whole lives would change
as a result of that.
So there was an institution that would come and put 70 % of the money 80 % of the money,
charge a small fee on a monthly basis, hope that you pay it and if you don't pay it and
file bankruptcy they lost, but as a result it opened a tremendous opportunity for wealth.
So imagine if the Muslim community bought homes and bought properties, the strength
they would have, financial strength they would have within the community but then shaitan
(satan) comes and tells them ‘This riba, riba, riba,’ so that you bank with those
groups or you don't bank at all and you just keep renting an apartment.
So no it has nothing to do with loan sharking, the modern day system is actually a system
that allows people to change their financial condition for the house that you bought with
30 % in 10 years if it went up and appreciated 10 % per year imagine how much your wealth
has increased as a result of that purchase.
So those are opportunities that are only allowed in certain countries, other countries have
no concern for people to buy property and their population are always put into a position
of poverty.
So all of these are a ni’mat (blessing) that Allah (AJ) brought.
When this western world was being established, the whole world had a system of land owners
so when landowners they would own hundreds and thousands of acres and if you owned the
land there was no reason to sell it, you gave those hundred thousand acres to your children,
they bought another ten thousand acres, another ten thousand.
What happened is then less than 1 % owned everything.
This nation understood that our people their only way of wealth and independence is they
have to own land, you know America was established and these countries were established, that
the people have to own so what did they understood from Islam - they created property tax.
So the invention of property tax was to take land away from these landowners, somebody
sitting with 100,000 acres, the government said ‘Okay if you're going to sit on it
and not give it to the people so that people can come and buy the land and
farm the land and work the land and improve their lives then you owe us now a property
tax.’
Well that made everybody sell all their essential property, ‘That's it we're not going to
hold it, sell everything,’ except the core things
that they want.
That was established by Prophet ﷺ in what we call zakat (Charity), same understanding.
Prophet ﷺ knows because this is a manual from heaven, that if these people take their
cash take their gold take their wealth and sit on it they will never move that money
in the community and as a result the community will become barrens - you know a small group
of families owning everything and everyone else just poor.
So the concept was, if they're going to hold it you're going to tax them and so that's
why zakat is taxed on everything you own.
If you have gold you held it no problem you're going to pay tax on it again and every year
you pay tax on it, pay tax on the savings you have, cash you have, real
estate you have, assets you have, everything.
And the largest flow of charity money on this earth now are zakat funds, so they want to
know the greatness of Islam and what Allah (AJ) has prescribed, they learned all of these
realities from Islam.
Because Thomas Jefferson was studying Islam he understood that, how their system of zakat
and he knew that to battle these property owners you have to tax them otherwise they'll
hold like barrens and nothing will move for people.
So alhamdulillah, they go back to the riba is not riba inshaAllah.
The only thing that is questionable on riba are credit cards, now that's the one that
everybody uses a credit card but they don't want to get a home loan.
So the credit card is the dangerous one because that really you can't get out of.
If you put yourself on a ten-thousand, twenty-thousand dollar credit card and before you know it
you pay down the credit card but the interest at 25 %! Your interest payment becomes $900
a month just interest payment on your credit card.
So that's the biggest danger, is try to be careful with the use of credit cards, home
loan is an immense investment good investment, the bank takes a risk so because of their
risk factor it's not loan sharking.
Just the credit card is something to be sort of in moderation because if you can pay it
off without incurring that 25% then you live every month and pay off the balance and that's
a safe way of living inshaAllah.
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