Imam Tahir Anwar: Pay Off Your House ASAP

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Originally posted by Imam Tahir Anwar on his Facebook page

[This message is for people who are homeowners and make good money]

– I’ve never understood why people don’t pay off their homes.
– I’ve never understood why people only make the minimum monthly payments, so they are enslaved to the financial institution for the entire period of the loan, at times for 30 years.
– I’ve never understood why some senseless people have barakah-free interest only loans?

The tech industry is an unforgiving industry. Once you reach a certain age, and there are younger people who can replace you at half your cost, you will be out of a job.

Over the years, I’ve witnessed many people lose their homes after periods of unemployment; they lose their well-paying jobs and often cannot find another one. These are people who made good money, but were busy spending it on cars, vacations and God knows what else.

A few days ago, I spent between Maghrib and Isha with an uncle, who has earned a large amount over the year—on occasion in access of a million dollars annually.

A generous man, who supported his entire family overseas—purchased each of them homes— and assisted widows for many years.

He’s been out of a job for over a year, and can’t find another. He lives in a large home, which he now must sell. He’s having a hard time selling it.

He was in tears, fearing that he would be on the street with his wife and (young) kids.

I reassured him that it would not happen, but honestly I was asking myself: Why didn’t he use some of his money to pay off his home that he’s lived in for almost 20 years? This way, one of his largest monthly expenses could have been avoided. He could have rented the house and moved into a smaller place, providing him with income in hard times.

This is the story of many people in our communities.

Lynnette Khalfani (The Money Coach) in her book “Zero Debt,” says that: “Debt is the longest-lasting economic curse, the most heinous financial plague, and the least recognized form of modern slavery afflicting Americans (and others around the World) this millennium.”

My advice, let’s call it an investment strategy, is at the least, secure your home. This is your best investment, not your 401K, not your stocks and not even your rental properties, if your primary residence isn’t paid off. This is a faith-based principle of building wealth.

A small home that you own is far better than a larger home that the bank owns. The peace of mind that accompanies this, especially for your family, is priceless.

Some will point out the tax advantages they enjoy on the interest/profit they pay. However, these advantages often aren’t all they are touted to be (if the interest on your mortgage is less than the standard deduction, you aren’t even getting an additional tax benefit) and there is always talk in every administration of taking away the home mortgage interest deduction. Plus, imagine the benefits you will enjoy from Allah, when you are debt-free, and for many, interest-free.

I end with 2 du’as that the Messenger of Allah (PBUH) taught us.

1) One he taught to Abu Umamah Ansari, who recited it, and said that Allah removed his worry and relieved him of his debt.
“Say, in the morning and evening, ‘“Allaahumma inni a’oodhu bika min al-hammi wa’l-hazani, wa a’oodhi bika min al-‘ajzi wa’l-kasali, wa a’oodhu bika min al-jubni wa’l-bukhli, wa a’oodhi bika min ghalabat il-dayn wa qahri al-rijaal (O Allah, I seek refuge with You from worry and grief, and I seek refuge with You from incapacity and laziness, and I seek refuge with You from cowardice and miserliness, and I seek refuge with You from being heavily in debt and from being overcome by men).”

2) Allahumma ikfini bi halalika ‘an haramik, wa aghnini bi fadhlika ‘amman siwaak. (O Allah, save me from haram and make the halal sufficient and by your favor, make me free from others)

These words were spoken by Ali (RA) when a person expressed a shortfall in his wealth to Ali (RA), he said: Shall I not show you what the Prophet Mohammad (PBUH) taught me, even if there is a debt equal to that of a huge mountain, Allah will pay it. Ali (RA) then recited this du’a.

Want to live a better life? It’s not just about the degree and the high paying jobs, it’s about allocating what you have, whatever you have, in the right way. Make the right calls.

4 Comments

  1. June 5, 2014

    This is absurd advice from both a theological and a financial point of view. No right minded financial planner would advise you to pay off your mortgage at the current 3% interest rates when the financial markets are paying so much more. Additionally, the whole ‘interest is riba’ argument has been debunked so many times it’s not worth arguing anymore.

    Reply
    • June 8, 2014

      So, interest is not riba now or what are you trying to say?

      I would actually say that no right minded Muslim should delay paying off their debt, especially if it involves interest.

      Reply
    • khan
      July 1, 2014

      Br Aziz There is little logic in what you are saying and complete logic in what the author suggests. Any right minded Muslim or financial adviser will agree.

      Reply
  2. abdulreply@gmail.com
    June 10, 2014

    Salaam

    Let me ask you question: we are in hard situation, as a volunteer we run a Islamic School but the current location in Masjid Basement is causing us lots of headaches and now we plan on buying a building, how do you recommend we handle this situation. We can’t think of renting another place because its too expensive or once the landlord knows its for Islamic School they always have excuses for not renting us the place, so only option we have is buy it through taking a loan. Alhumdulillah all the board members are volunteers and its 100% non-profit organization. But we are stuck with this situation of taking a loan or not.

    Reply

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