Home Financing in Islam: A Study of Understanding and Practices Among UiTM Staff

According to the Islamic maqasid shariah, a home is necessity (dharuriyyat) to the people. Home financing is therefore one of the mechanisms that helps consumers in need of a house. Though it has become substantially important these days, there are some who are entrapped by the housing debt and become bankrupt. From 2005 until May 2010 alone, there are about 6022 cases of bankruptcy due the inability to repay the housing debt. This paper shall provide an empirical analysis regarding the practice of home financing and the level of understanding of the Islamic debt principle. For this purpose, cross-sectional survey methodology is applied. Data in this paper are obtained from the questionnaire given out to 690 respondents from UiTM campuses in Shah Alam, Pahang and Penang. The respondents include academic and administrative staffs who are Muslims. The t-test results show that there are no significant relationship between the practice of home financing and level of Islamic debt understanding.