What is the ruling on giving loans to people in exchange for a mortgage on a house or shop?
Machine translationRead the Arabic original
Question:
The questioner says: We have a person who gives people loans reaching forty or seventy thousand, because he says this is in exchange for a mortgage on the house or shop?
Answer:
It is not permissible to give a loan intended to benefit the lender from the borrower by mortgaging his house in order to exploit the house and live in it. However, if the mortgage is merely for documentation, where he lends him a sum of money and the house is mortgaged with him only as a document, then there is no harm. But if his intention is to invest in the house, then this is a loan that brings benefit, and it is riba (usury or interest). Yes.
The questioner says: We have a person who gives people loans reaching forty or seventy thousand, because he says this is in exchange for a mortgage on the house or shop?
Answer:
It is not permissible to give a loan intended to benefit the lender from the borrower by mortgaging his house in order to exploit the house and live in it. However, if the mortgage is merely for documentation, where he lends him a sum of money and the house is mortgaged with him only as a document, then there is no harm. But if his intention is to invest in the house, then this is a loan that brings benefit, and it is riba (usury or interest). Yes.
Source
قناة «العلامة الدكتور صالح الفوزان»، ما حكم إعطاء قروض للناس مقابل رهن المنزل أو المحل؟ #فتاوى الفوزان — youtube.com
The Arabic text is a machine transcription of the audio recording.