Original question from telegram group: What is the Shariah’s position of a muslim working as a Mortgage Advisor? #
Vetted answer:
The role of a mortgage advisor typically involves assisting individuals in obtaining or refinancing a mortgage by providing guidance on financial products and negotiating better loan rates on their behalf. This role encompasses understanding clients’ financial situations, recommending suitable mortgage products, assisting with application processes, and providing insights into market trends. Furthermore, the roles and responsibilities of a mortgage advisor may include, but are not limited to, the following:
- Assesses clients’ financial situations to determine mortgage affordability;
- Recommends suitable mortgage products based on clients’ needs and financial status;
- Assists with the mortgage application process, including paperwork and documentation;
- Provides insights into mortgage market trends and interest rates; and
- Access to a range of lenders to find competitive mortgage rates and deals.
Mortgage advisors can earn their income through several different models, depending on the nature of their employment and the specific arrangements they have with clients and lenders. Their compensation structure is pretty much similar to working as a financial advisor, as per our previous discussion. Aside from the mentioned, mortgage advisors employed by banks, private societies, or mortgage brokerage firms may also receive a regular salary. In this case, they shall have a fixed base salary, plus any bonuses or commissions based on their sales performance.
From the Shariah perspective, the position of a mortgage advisor can be problematic due to the inherent involvement with interest-based (riba) loans, which are unlawful in IslamHere are some key considerations:
- Shariah Compliance: In many regions, most mortgage products are interest-based. Engaging in any activity that facilitates or promotes riba is considered non-compliant with Shariah principles.
- Role and Responsibilities: As a mortgagee advisor, the primary duties often involve recommending and facilitating interest-based loans. This directly contradicts Islamic teachings, which prohibit engaging in, supporting, or benefiting from riba-based transactions.
- Ethical and Religious Obligations: A Muslim should avoid roles that directly involve or support activities deemed unlawful in Islam. Encouraging or advising clients to take interest-based loans can be seen as supporting prohibited actions, which is discouraged in Islam. The Quran states: “Let there be a group among you who call others to goodness, encourage what is good, and forbid what is evil—it is they who will be successful.” (Surah Al-‘Imran, 3:104).
- Income Source: The income earned from a job involving riba is considered impure in Islam. Seeking sustenance through halal means is emphasized, as mentioned in the hadith: “No flesh grows that was nourished by that whichis unlawful, but the Fire is more appropriate for it” (at-Tirmidhi, hadith no. 558).
In the Muslim Singaporean context, the role of a mortgage advisor is generally viewed as Shariah non-compliant. As we all know, all home loans in Singapore are still interest-based, and currently, there are no Islamic-based home financing options available except for private properties. Regardless of the job scope and payment’s structure, the income earned from being a mortgage advisor is generally viewed as Shariah non-compliant mainly due to the central duties of the role involved in assisting individuals and/or businesses in making informed financial decisions on interest-based loans.
Regardless of the client’s faith, a Muslim mortgage advisor is not allowed from endorsing or recommending Shariah non-compliant activities, such as taking out interest-based loans, as this would be considered supporting unlawful Islamic actions.
Furthermore, promoting or encouraging forbidden actions can accumulate sins for the individual, as expressed in the hadith: “Every caller who invites people to misguidance and is followed will bear a burden of sin equivalent to that of those who follow him, without it reducing their burden at all. And every caller who invites people to true guidance and is followed will earn a reward equivalent to that of those who follow him, without it reducing their reward at all.” (Sunnah Ibn Majah, hadith no. 205).
IFSG recommendations:
- Advising Muslim Clients: If you are advising a Muslim client, it is crucial to guide them towards minimizing their engagement with riba. Encourage them to pay off interest-based loans as quickly as possible and avoid taking additional interest-based loans for non-essential purposes. This could be in the form of advising against purchasing an additional house with an interest-based loan if the intent is driven by a desire for luxury rather than genuine necessity. You may refer to our previous feedback on this matter.
- Seeking Alternative Employment: Consider looking for employment in Shariah-compliant industries. Fields such as real estate (without riba involvement), technology, education, health sciences, and other sectors that do not deal with interest-based transactions are preferable.
- Continued Education: Stay informed about Islamic finance principles and explore opportunities within the growing field of Islamic banking and finance. This sector offers roles that align with Shariah principles, providing both career opportunities and religious compliance.
In conclusion, the role of a Mortgage Advisor in an interest-based framework is generally considered non-compliant with Shariah. Muslims who are in this role, are encouraged to seek alternative roles that align with Islamic principles.
Rest assured that sincere efforts in seeking lawful sustenance will be blessed as mentioned in Surah al-‘Ankabut, verse 69: “As for those who strive in Our cause, We will surely guide them along Our ways. And Allah is certainly with the doers of good.”
May Allah guide us in making righteous choices and bless our efforts.
FAQ #131: Can i have a career in Islamic Banking And Finance without having a degree related to it?
