ISLAMIC HOME FINANCING AND OWNERSHIP TRANSFER TO THE CUSTOMER: MODELS COMPARED

In my latest article on Islamic home financing models, which was published in the ISRA International Journal of Islamic Finance (June, 2013), I showed that the Zubair Diminishing Balance Model (ZDBM) is free of return compounding and that the transfer of ownership to the customer perfectly matches the payment rate—the two norms Islamic models must meet. It is satisfying to note that AlMaghrebi (2013), in the same issue of the Journal, took up these issues in a comprehensive and tightly argued conceptual paper and convincingly vindicated my position on the compounding issue.