Frequently Asked Questions

Frequently Asked Questions

At EQRAZ, we understand that, for our customers, the decision to take only halal financing products is one of the most important ones in their lives. We wish to provide all stakeholders with 100% transparency and clarity. We believe that your questions, critique and challenges will only help us in making our products, services and offerings even better.

Therefore, we encourage our clients to not hold back, and to ask questions and raise concerns freely. All we request is that communications, discussions, comments and questions be respectful, sincere and in good faith – with the intention to help us improve.

At EQRAZ, we understand that, for our customers, the decision to take only halal financing products is one of the most important ones in their lives. We wish to provide all stakeholders with 100% transparency and clarity. We believe that your questions, critique and challenges will only help us in making our products, services and offerings even better.

Therefore, we encourage our clients to not hold back, and to ask questions and raise concerns freely. All we request is that communications, discussions, comments and questions be respectful, sincere and in good faith – with the intention to help us improve.

Legal
Should I obtain advice from anyone else before proceeding?

Yes, you will need your own lawyer to work with EQRAZ’s closing lawyer to advise you. EQRAZ can recommend from our panel of lawyers already well-versed with our product documentation. However, you are free to choose your own lawyer if you so prefer.

Should I use an EQRAZ-approved lawyer?

We recommend lawyers that have extensive experience in mortgage closings, and have the required training and knowledge associated with EQRAZ’s halal home financing product. We suggest that you use one of our recommended lawyers to ensure that your mortgage closing happens efficiently and without delay. All closings will be completed by two lawyers, of whom one will act on your behalf and the other will act on EQRAZ’s behalf. This is recommended by law society standards.

All our recommended lawyers are professionals that strictly adhere to the rules and codes of professional conduct within their region of practice and in accordance with their respective law societies.

While you are certainly entitled to use a lawyer of your own choosing, we believe that working with a lawyer recommended by us, and who is already familiar with our documentation and processes, will help you save on legal fees and expenses, and will likely make the closing process faster and easier.

Cost
Why are Shariah-compliant finance products priced based on percentage rates. Isn’t this interest?

Globally, all Islamic banks and financial institutions advertise and offer their products based on a percentage rate. This allows clients to make an apples-to-apples comparison between the cost of halal financing and that of conventional products.

A percentage rate simply informs you how much the financing will cost you in proportion to your halal home financing amount, and does not indicate that there is any interest involved.

Why is EQRAZ’s halal home financing more expensive than the cheapest available conventional Loans?

In Canada, as in all western countries, halal financing is more expensive because Islamic financial institutions (“IFIs”) do not have access to low-cost funds available from the well established interest-bearing financial markets. IFIs have to obtain halal funding from limited sources, which is more expensive than conventional interest-bearing funding. As halal financing grows in Canada, we expect that the costs will reduce, as they have generally done so in countries with mature Islamic Finance industries.

Who will benefit from the increase in property prices over time?

As the legal and beneficial owner of the property, you will keep all the profits from property price increases. Similarly, in the event of a property price reduction, you will also absorb the loss.

Can I make partial or complete prepayments on my halal mortgage?

Yes. You can partially or fully prepay the financing amount due at any time throughout the financing period. However, prepayment charges will apply.

Shariah
What contracts will I sign and are these compliant with both Shariah and Canadian law?

You will be required to sign two agreements as follows:

- The Murabaha Agreement
- The Legal Mortgage Charge

You will NOT be required to sign any agreements with other parties. All the above documents are 100% compliant with both Shariah (and AAOIFI) as well as Canadian law.

Why do I incur late-payment fees in case of delayed payments? Is this halal?

There may be times when some customers make their payments late. This results in default charges payable to our mortgage administrator, which are beyond our control. We pay these default charges on your behalf and recover them by charging you. We also apply delay penalties, approved by EQRAZ’s Shariah Supervisory Board and compliant with AAOIFI, to discourage payment delays, which would otherwise increase the cost of halal financing significantly for all our clients. However, the additional amounts are donated to charity. EQRAZ does not profit from any extra income generated from these additional charges.

This is compliant with Shariah law and AAOIFI standards, and approved by EQRAZ’s Shariah Supervisory Board.

Security
What happens if I lose my job or I am unable to pay you for any reason?

In the event that you become unable to meet your payment obligations to EQRAZ, it is critical that you inform us immediately. While our actions will depend on your individual circumstances, we will make a sincere effort to work with you in a supportive and collaborative way through your difficult situation, and to deal with you fairly and compassionately.

However, it is ultimately your responsibility to ensure you can afford your monthly payments as, in the event of delays or default, you may lose your home.

Will I own and have title to my financed property?

Yes. You will hold title to the property, and have the full rights and responsibilities of ownership.

EQRAZ only holds a mortgage charge on your property, which means that if you sell the property, you must first clear your outstanding financing amount and applicable fees to EQRAZ before you can use the proceeds from the property sale for any other purpose.

Can I transfer my existing interest-bearing or halal mortgage to EQRAZ?

Yes. You will apply for EQRAZ’s home financing plan just as a new mortgage and, on approval, your financing and the legal mortgage charge will be transferred to EQRAZ.

If I wish to sell my property during a negative equity situation, can I do so and are there any conditions surrounding this?

You may sell the property to a third party at any price you are willing to take. However, you will have to settle your outstanding dues, including applicable fees and charges, to EQRAZ out-of-pocket before the property’s title can be transferred to the buyer and the property sale can be concluded.

Is my home and financing safe with EQRAZ?

YES! IT IS 100% SAFE! EQRAZ is Canada’s ONLY halal home financing provider that has engaged one of Canada’s most well-established and trusted firms for mortgage administration.

Our mortgage portfolio is structured to be completely independent of EQRAZ as a corporate entity. If, God forbid, anything should happen to EQRAZ, your mortgage will be taken over by the financing bank , and will continue to be administered without any risk or interruption to you . Your financing will remain 100% halal. Your mortgage will neither be disrupted nor put at risk, and your financing as well as your home shall remain safe and in your hands.

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