Islamic finance for housing is one of the most discussed topics right now. And the most of people who are interested are millennials.
Millennials are people born between 1980 and 2000. They were once thought to be a quiet and inactive generation, even if they were lazy and self-centred. However, they are a value-driven group that believes in the power of activism. And they are having an impact.
According to a 10-year study, millennials are not only the most diverse generation, but they also want to change the world. According to the Millennial Impact Report, they are not only bringing about the change but also changing the way it is brought about.
Millennials deeply care about variety of things, with civil rights and debt relief among their top priorities. Furthermore, they act to support their values because they believe their actions can have an impact on the world. And they don’t wait for a big opportunity to make a big change; they think about the consequences of even small everyday actions like their purchasing habits. Among these actions are where and how they spend their money: Another recent survey found that 42 per cent of millennials are more likely to buy from companies that support causes that are important to them. Millennials are careful shoppers.
In the year 2021, Millenials are age between 20-41 years old. At this age, most people plan to have a house and family. With a very different picture of millennials that have emerged: caring, value-driven people who use everyday actions to enhance social justice. Islamic home financing can be the best choice for Muslim Millenials to buy a house. Here are the 3 reasons why this generation should consider Islamic finance for their housing.
1. Invest in Your Faith
First and foremost, faith is important to Muslim millennials. While other faith groups have seen a decline in ties to religion among this generation, Muslim millennials are just as likely as their elders to say religion is “very important” to them.
As more millennials purchase homes, Islamic home financing is a natural choice. Millennials today, unlike previous generations who did not have Islamic home financing options, do not have to choose between their values and their desire to become homeowners. The principles of Islamic finance are recognizable: Riba (interest) is not permissible, especially when a riba-free alternative is available.
2. Advocate for Social Justice
Younger generations are becoming more aware of, and less tolerant of, exploitation and unequal power dynamics. A traditional mortgage is highly inequitable, with large banks empowered to enact a slew of policies that profit from customers who come to them in need. Worse, some of these policies, such as percentage-based late fees, punish the borrower, even more, when times are tough. This entire scenario is repugnant to anyone who cares about social justice and equity.
Islamic financial principles protect both the community and the individual by limiting the accumulation of wealth by society’s most powerful. Islamic home financing options offer a viable alternative based on permissible principles such as joint investments “Musharakah.“
3. Keep Debt to a Minimum
According to Business Insider magazine, debt is a thing that stresses the millennials the most. According to a recent survey, nearly half of millennials with a mortgage reported feeling “some” or “a lot” of stress about it – a higher percentage than respondents of other ages. Young adults define success as being debt-free rather than rich.
Islamic finance for housing is a revolutionary model of home financing that is based on sound Islamic principles such as Diminishing Musharakah and Ijarah. Musharakah, which means “sharing” in Arabic, refers to the fact that the two parties jointly invest in a property. While Ijarah means to rent; it is a type of contract in Islamic Finance that requires the bank to buy an item for a customer and then lease it back. Therefore, the agreement between the bank and the customer is not a loan, but a partnership or rental instead.
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