Which statement is correct in respect of Sharia-compliant home purchase plans?

Which statement is correct in respect of Sharia-compliant home purchase plans?

• A. The Murabaha method involves the payment of rent to the lender.
• B. Under the Murabaha method, the property is purchased by the lender and sold to the applicant at a higher price.
• C. Under the ljara method, the lender purchases the property and immediately transfers ownership of it to the applicant.
• D. Only the ljara method involves the payment of interest to the lender.

Answer: (B)

In Sharia-compliant home finance, Murabaha is a cost-plus purchase: the lender buys the property and then sells it to you at a higher, fixed price to be paid over an agreed period. There is no rent or interest involved—the increase in price is the lender’s profit, and you repay the total amount in installments. Ownership of the property is transferred as part of the sale process. The other statements don’t fit. Murabaha does not involve paying rent to the lender, which is a feature of Ijara leases. In an Ijara arrangement, the lender typically owns the property during the lease and only transfers ownership later if there’s a separate agreement at the end. And neither method uses conventional interest; both provide Sharia-compliant alternatives to interest-bearing debt.

In Sharia-compliant home finance, Murabaha is a cost-plus purchase: the lender buys the property and then sells it to you at a higher, fixed price to be paid over an agreed period. There is no rent or interest involved—the increase in price is the lender’s profit, and you repay the total amount in installments. Ownership of the property is transferred as part of the sale process.

The other statements don’t fit. Murabaha does not involve paying rent to the lender, which is a feature of Ijara leases. In an Ijara arrangement, the lender typically owns the property during the lease and only transfers ownership later if there’s a separate agreement at the end. And neither method uses conventional interest; both provide Sharia-compliant alternatives to interest-bearing debt.