Important Tips about Home Purchase Plans (Ijara n Musharaka)

Firms regulated by the FSA have to give you certain documents. Whenever you see the sign, this means you are being given information that’s important for you.

Keyfacts documents that firms must give you

You should get the following documents:

■about our home purchase plan services –
explains the service and the range of products firms offer, and, if appropriate, the names of the Islamic scholars they have consulted.

■risks and features of this home purchase plan
– will explain the key risks, features and benefits of the plan.

■financial information statement –
will give you the costs involved in the plan – ie the overall cost and how much you will pay each month.

■Offer letter
including an updated financial information statement – you’ll get this when the firm offers you a home purchase plan. Use this to make sure you’re getting the product you applied for.

Complaints

If things go wrong with a firm, you should take your complaint to the firm first. If you can’t resolve the problem between you and the firm, you may have access to the Financial Ombudsman
Service – see Useful contacts . The Ombudsman deals with complaints that cannot be resolved between you and the firm.

Compensation

If you are dealing with a broker who advises you or arranges the sale of the plan for you, and the broker stops trading, you may have access to the Financial Services Compensation Scheme.
The scheme provides a safety net for consumers.

Don’t forget
■A home purchase plan may be suitable for you if you want to buy your home in a way that doesn’t involve paying interest.

■You will bear the costs of two solicitors’ fees and you may pay more for a property valuation and building insurance.

■You won’t legally own your home until the end of the plan – this could be between 7 and 25 years.

■Home purchase plans are complex products, so make sure you get independent legal advice.

■If you want Islamic services, the about our home purchase plan services document will tell you which firms can offer them.

■Make sure you deal with a firm FSA regulates.

■Make sure a home purchase plan is right for you – there are other ways of buying your home.

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