My understanding with Sharia compliant mortgages is no interest can be charged and many are set up similar to a lease option - eg lease it for 25 yrs and you have an option to buy it for $0.
This means the potential home buyer rents the property ( I would assume at quite a "premium" to normal market rates ) for a set term of, say, 300 months and at end of that term, ownership transfers to the "renter".
That's all fine in a perfect world where everything goes as planned, but given no interest can be charged, how would the situation where the "renter" misses a payment etc, be handled?
This means the potential home buyer rents the property ( I would assume at quite a "premium" to normal market rates ) for a set term of, say, 300 months and at end of that term, ownership transfers to the "renter".
That's all fine in a perfect world where everything goes as planned, but given no interest can be charged, how would the situation where the "renter" misses a payment etc, be handled?