IjaraCanada is a sharia structuring company. The Islamic methods of our transaction is lease to own transaction. But in Canada as the government rule, all transaction with less than 20% down payment Insurance premium is required.

What is the Mortgage Insurance Premium?

CMHC (Canada Mortgage and Housing Corp) Premium is mortgage insurance covered by the government (CMHC is a government institution), PMI or Private Mortgage Insurance Premium is mortgage insurance covered by a private company. A customer is covered by CMHC if they do a low down payment below 20%.

Less than a 20% down payment is a high-ratio mortgage.

With a high-ratio mortgage lender will need mortgage loan insurance. Mortgage loan insurance lets client buy a home with a minimum down payment of 5%, Mortgage loan insurance required because it protects the lender to obtain CMHC Mortgage Loan Insurance, lenders pay an insurance premium. Typically, lender will pass these costs on to client. Lender will give the exact price when client applies for a mortgage. It will be based on client's LTV (Loan To Value)

Canadian client can go visit this link for the CMHC insurance premium formula of calculation:

http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

Down payment is the initial upfront portion of the total amount due and it is usually given in cash at the time of finalizing the transaction. A loan or the amount in cash is then required to make the full payment.

Down Payment For Purchasing Home In US

Various down payment based on the type of purchasing property:

As low as 3.5% down payment for purchase primary home in US

As low as 20% down payment for purchase investment property in US

Various down payment based on the type of finance amount:

As low as 25% down payment for finance amount $417K to $700K

As low as 30% down payment for finance amount $700K to $800K

As low as 35% down payment for finance amount $800K to above

Otherwise you can apply for FHA loan for purchasing property more than $417K with less down payment

Down payment in Canada

In General, if you are a first time buyer and reporting your income to CRA (Canada Revenue Agency) for the past 3 years you are allow to make a minimum down payment of 5% if employed, and minimum of 10% if self-employed and buying a property for your primary residence. But as the government rule, all transaction less than 20% down payment Insurance premium is required.

Question:   I am currently looking for other options. I have found another company that has a similar system, the difference being they will be the owners of my home and I will rent to own directly from them. This seems more sound to me then what ijaracanada offers.

Answer:   Ijara Canada has that option also, and in fact we did have the property ownership in the trust names exclusively till 2011, when we started offering an option to customers, either they can have the property in the name of the trust only, or have it in their name but they have to sign a deed transferring the property to the trust, which we do not record. Reason for this is that many people were worried about what would happen in the event of a bankruptcy as with UM financial where some people are still stuck today trying to get title back into their names, in fact, many came to us for financing and several had 2nd liens on their properties that they did not know about.  We approached our Scholars with this issue and their determination was that since the deed is signed, that goes to intention, but we are not required to record it on the official title at our discretion, that way customers have security and are still compliant with the Sharia. 

A further point we should make is that other company, is utilizing our exact system and is made up of past memeber of UM Financial, the same people that put 2nd liens on properties without customers knowledge, so why would anyone want to work with people that went bankrupt vs a company that has been steadily growing in the US and Canada since 2005?  As a further example of the caliber of ethics involved, one of the principles of this competing company signed an NDA and non-Appropriation agreement with Ijara, yet still proceeded to violate and copy the process under the new company name, is that they type of company you want to do business with? But don't take our word for it, see what the Global Mail says about the UM Financial Fraud and the previous management team that has started another Sharia Finance Company in GTA: http://www.theglobeandmail.com/news/national/rcmp-charge-missing-toronto-financier-with-43-million-mortgage-fraud/article16972349/

Ijaraloans is the fastest growing Islamic Finance company in the US and Canada, offering financing solutions in all 50 States and all Provinces in Canada.  Be safe, work with an established proven company, there is no need to take risks with your title, especially when knowledgeable scholars have approved our system.

What is the Loan Term?

The Islamic Method that we're using is Ijara- Wa-Iqtina or lease to own.

The term acts like a 'reset' button on a lease. When the term is up, you must renew the lease on the remaining principle, at a new rate available at the end of the term.
The fixed loan term: 1, 2, 3, 4, 5 years

Question:

I also have some friends, who bought houses here in Calgary by taking loans from banks; and I opposed them on that time, that; this is haraam in Islam to take loan from banks as they involve interest. Now when I telling them that I am taking a sharia compliant loan from Ijara Canada, they are saying what is the difference between Ijara and bank loan ?.

I am currently unable to satisfy them, they are saying there is no difference and even Ijara is taking higher interest than banks, which they are calling profit.

How can I clear them the difference between bank loan and Ijara loan ?. I want to own the house and also unsinfull in the eye of Allmighty Allah.

Allah bless you.

Answer:

There are several questions here that need addresses, the first is really how can a bank invest in an Ijara transaction, and the second is how is it different.

Firstly, there is no prohibition that excludes a non-Muslim from making an Islamic investment, so a bank can be an investor in an Ijara transaction as long as they do it the way we need them to, additionally, please note that Ijara does Not borrow money period. The investor invests directly in each transaction.

Second in understanding the difference we need to keep in mind that economics is different than structure. The terms, cost, rates etc are all economic factors and have no restriction or limitation from an Islamic perspective, in fact an Islamic transaction can in fact be less, the same or more than a traditional mortgage transaction, the difference is in structure. The versus and ruling surrounding Riba refer only to how the profit is earned not how much it is, how its calculated, or where it comes from. Our transaction is very simple, it is a rent to own, the profit is earned as a rent on property (bey/trade) not as a rent on money (riba/interest). it is interesting that the argument your friends are making is the same argument that the non-believers made before Allah revealed Surah Albakarah Ayah 275

Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah . But whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein.

Basically they say that islamic finance is the same as regular finance, but Allah has clearly allowed one and forbidden the other. May Allah guide those are astray.

Purchase

below are the list of required documents for pre approval

for employee:

- Clear copy of ID (driver’s license, Passport, etc.)
- Clear copy of SIN card
- Letter of employment
- T4 for last 2 year (2012 2011 or 2013 when applicable)
- Notice of Assessment from 2 most recent tax year to show if there are any taxes owed
- Last 3 months of Official Bank statements (or RRSP Statements) -- all pages, even if intentionally blank with account ownership details
- Last 3 months of Pay Stub / Pay Slip

for self-employed additional documents needed:

- T1 Generals for last 2 year (2012 2011 or 2013 when applicable)
- Financial Statement / Financial Report of your business
- Copy of Articles of Incorporation, showing that you are the owner/ directors of the corporation

for Final approval (Purchase) client must send the above documents along with:

- Firm Purchase Agreement (all pages including shcedules, plan, disclosures if any)
- Property’s MLS Listing
- Copy of initial deposit receipt made to the seller/builder
- Bank statement showing the withdrawal of the inital deposit to the seller/builder

For Refinance
below are the list of required documents

for employee:

- Clear copy of ID (driver’s license, Passport, etc)
- Clear copy of SIN card
- Letter of employment
- Notice of Assessment from 2 most recent tax year to show if there are any taxes owed
- Last 3 months of Official Bank statements (or RRSP Statements) -- all pages, even if intentionally blank with account ownership details
- Last 3 months of Pay Stub / Pay Slip
- Last Mortgage Statement (or paid off statement)
- Most Recent Homeowner Insurance,
- Property Tax Bill for subject property

for self-employed additional documents needed:

- T1 General for last 2 year (2012 2011 or 2013 when applicable)
- Financial Statement / Financial Report of your business
- Copy of Articles of Incorporation, showing that you are the owner/ directors of the corporation

other than the above-mentioned documents, please complete the following question:
- What was the original purchase price of this Property?
- When was it purchased?
- What is the total property tax?
- What do you think it is worth today?
- What is the current balance?
- Do you need to take equity out? If not, what is the balance you would like to refinance?
- What is your present rate?
- How soon would you like to close this deal?