1.)  How is the Profit Rate determined?
2.)  How does the product work?
3.)  How is it different from a conventional transaction?
4.)  How is the structure different from Ijara?
5.)  What are the costs?
6.)  Does it have private mortgage insurance (PMI)?
7.)  How is the Mark-up determined?
8.)  What happens if I want to pay off early? How is the payoff amount determined?
9.)  How much of my payment goes to pay off the Installment balance?
10.)  What are the late fees for late payments?
11.)  Do I have to escrow my taxes and insurance?
12.)  How much do I have to put down?
13.)  What is the difference between an Installment Contract and a Note?
14.)  Can my Installment payment change? What if I make a large principal payment?
15.)  Do I get to keep all the profit when I sell?
16.)  Does my realtor need to know anything special?
17.)  Does the seller need to know anything special?
18.)  Can I refinance into a Murabaha? Can I refinance out of a Murabaha?
19.)  Would my Homestead tax exemption be affected?
20.)  Why is First American Title Insurance Company recommended for these transactions?
21.)  If there is no interest on the Murabaha transaction, will I still get a 1098-INT statement for income tax purposes?
22.)  Can I make automatic payments?
23.)  Can I view my home financing balance and details online?
24.)  What happens if you have to foreclose?
25.)  What happens to the home if the titleholders die?
26.)  Do I need to ask permission prior to putting the home up for sale?
27.)  Can I use the Murabaha financing to purchase investment properties?
28.)  Is it more difficult to qualify for Murabaha than conventional financing?
29.)  Does UIFC have a fatwa for the Murabaha product? Can I get a copy? Who has issued it?
30.)  When am I allowed to lock in my profit rate?
31.)  What states can I get Murabaha financing in?
32.)  Where does UIFC get its funds to purchase and finance the Installment transaction?
33.)  Who owns the Installment transaction after closing?

1.)  How is the Profit Rate determined?
Our profit rate is determined by market conditions at any given period and the amount of profit the investor (University Bank) wishes to make on the transaction. This will comprise part of the price, and you are free to accept it or reject it under the Islamic principle of offer and acceptance.
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2.)  How does the product work?
Murabaha is primarily used for a home purchase. You identify the home you would like to purchase. UIFC purchases the home on your behalf and then sells it to you at a marked up price. You then make equal installment payments toward the balance of the marked up price of the home.
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3.)  How is it different from a conventional transaction?
A conventional transaction is a loan of money to you for the purchase of a home on which you pay interest. A Murabaha transaction is a sale of a home with a deferred payment plan
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4.)  How is the structure different from Ijara?
An Ijara is a lease, whereas a Murabaha is a sale. In an Ijara, a trust is on title to the property, and you enter into a lease-to -own contract with the trust. In a Murabaha, UIFC will purchase the home on your behalf and then sell it to you at a marked up price on a deferred payment plan.
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5.)  What are the costs?
Just as there would be with any home purchase product there are standard costs associated with the Murabaha. Generally, these fees include customary property and credit diligence including an appraisal of the property, your credit report, survey of the property, your application, processing for the transaction, recording, title insurance and standard property sales settlement costs. 
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6.)  Does it have private mortgage insurance (PMI)?
On properties where you are not able to place a down payment of 20% or greater, we will be obliged to insure ourselves. We will add this charge to the price of the house and you will be free to accept the house price as adjusted or to reject it. We will disclose to you this price element. You do not contract to pay PMI on a monthly basis, and we do not increase the rate as other financial institutions may do. 
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7.)  How is the Mark-up determined?
The marked up price is determined by the rate of profit attractive to UIFC or any Murabaha Investor.
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8.)  What happens if I want to pay off early? How is the payoff amount determined?
Though we are not obligated under Shariah guidelines to collect less than the full contracted amount, consistent with Quranic encouragement to be kind to debtors, as well as U.S. law, the Murabaha Vendor will accept an early payment and forgive a portion of the mark up as indicated in the allocation schedule. This is based on (an amortization of) the number of months you have lived in the home versus the number of months remaining on your contract. 
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9.)  How much of my payment goes to pay off the Installment balance?
The installment balance is the entire marked up price, thus your entire payment, minus any escrows (property taxes and home owners insurance), go toward paying off the installment balance. 
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10.) What are the late fees for late payments?
There is a flat fee of $50 that is used to compensate for the cost of collection. We do not charge you an arbitrary percentage of your monthly payment as others may. This is paid to a third party company that makes collections on our behalf.
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11.)  Do I have to escrow my taxes and insurance?
Yes. Our program collects taxes and insurance on a monthly basis into an escrow account from which we will disburse payments to the taxing authority and insurance provider on a timely basis. This insures that you are never in default due to a failure to pay taxes or maintain required property insurance. 
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12.)  How much do I have to put down?
Under most circumstances, the standard minimum down payment for the Murabaha program is 12%. However, under special conditions down payments of 5% or less are acceptable.
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13.)  What is the difference between an Installment Contract and a Note?
The Installment Contract is a contract signed by two parties which reflects the nature of the Murabaha, which is the sale of property. The Note reflects the nature of a conventional mortgage, which is a loan of money with interest. 
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14.)  Can my Installment payment change? What if I make a large principal payment?
Your installment payment cannot change, even when making a large principal payment. It cannot change because it would mean a change in the original contract. 
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15.)  Do I get to keep all the profit when I sell?
Yes. The property belongs to you and is held in your name, and title is given to you, so you are entitled to all the proceeds from the sale of the property. 
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16.)  Does my realtor need to know anything special?
Yes. Because this is not a conventional mortgage, we have a separate and different set of documents that need to be signed at closing. Most title companies are not familiar with our unique set of documents, and in an effort to streamline your closing, we advise you to hold your closing at First American Title as we have established a relationship with them for you, and they are familiar with the uniqueness of this transaction. Additionally, since UIFC will actually purchase the home from the seller, all parties need to be aware of this. Prior to closing, both parties will need to sign an addendum to the purchase agreement acknowledging this fact.
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17.)  Does the seller need to know anything special?
Yes. Because this is not a conventional mortgage, we have a separate and different set of documents that need to be signed at closing. UIFC will actually purchase the home from the seller, and the seller should be aware of this. Prior to closing, both you and the seller will need to sign an addendum to the purchase agreement acknowledging this fact. 

Also, sellers normally choose the title company where their transaction will close and most title companies are not familiar with our unique set of documents. In an effort to streamline your closing, we recommend that you hold your closing at First American Title, as we have established a special relationship with them for you, and they are familiar with the uniqueness of this transaction.
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18.)  Can I refinance into a Murabaha? Can I refinance out of a Murabaha?
If you are the owner of your property, with no partners, you are not able to use our Murabaha program to replace an existing mortgage. You will only be able to apply our Murabaha program if you are not the majority owner of a property; you may apply our Murabaha program if there is another entity on title to the home currently, which entity will not be on title after replacing that financing through our Murabaha program. 

You are allowed to refinance out of our Murabaha program at any time you wish. We do not have a pre-payment penalty. 
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19.)  Would my Homestead tax exemption be affected?
No, you are on title to the home, and have every right to a Homestead tax exemption, just as you would for any primary residence. 
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20.)  Why is First American Title Insurance Company recommended for these transactions?
We have established a relationship with First American Title Insurance Company, and have educated them on the uniqueness of our transactions. It is important that all of your closing documents are processed and recorded properly, and we can assure you that First American Title will do so. 
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21.)  If there is no interest on the Murabaha transaction, will I still get a 1098-INT statement for income tax purposes?
As a financial institution, we are only able to show profit on the financing of a home in one fashion. Thus we will issue a 1098-INT which you may choose to use to deduct from your taxes. 
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22.)  Can I make automatic payments?
Yes, this can be taken care of by our sister company, Midwest Loan Services, who services all our transactions. 
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23.)  Can I view my home financing balance and details online?
Yes, this information can be viewed online here. 
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24.)  What happens if you have to foreclose?
Should you not make the payments for which you contracted; the investor will take title and possession of the property. Should the property be sold for more than you owe, the profit may go to the investor subject to applicable law.
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25.)  What happens to the home if the titleholders die?
It will transfer to your estate as identified in your will, or if you have no will, the transfer will be directed by the state’s laws.
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26.)  Do I need to ask permission prior to putting the home up for sale?
No, you own the home, and are able to market the property as you wish. 
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27.)  Can I use the Murabaha financing to purchase investment properties?
Yes, you may use our Murabaha program to purchase investment properties of 1-4 units.
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28.)  Is it more difficult to qualify for Murabaha than conventional financing?
No, we have the same qualification process, no more or less stringent. 
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29.)  Does UIFC have a fatwa for the Murabaha product? Can I get a copy? Who has issued it?
Yes, UIFC has an operational fatwa from scholars who are globally reputable in the Islamic Financing industry. It is available online (http://www.universityislamicfinancial.com) for review by anyone or contact an Islamic Banker and a copy will be sent to you. 
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30.)  When am I allowed to lock in my profit rate?
Once you have submitted a signed application, an application deposit of $300.00 (refundable at closing) to your Islamic Banker, and the closing date of your transaction has been determined, you are able to lock in the current profit rate.
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31.)  What states can I get Murabaha financing in?
Currently UIFC is only licensed for home finance business in the states of California, Connecticut, Illinois, Indiana, Maryland, Michigan, Missouri, New Jersey, New York, Ohio, Pennsylvania, Texas, Washington and Virginia. Our home financing products are only available to individuals who would like to purchase in these states.
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32.)  Where does UIFC get its funds to purchase and finance the Installment transaction?
UIFC is a Shariah compliant subsidiary of University Bank and uses the funds of Shariah depositors to purchase the selected home from the seller.
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33.)  Who owns the Installment transaction after closing?
UIFC acts as an agent for University Bank to buy and sell homes. As a technical matter of Shariah, that investor and any of its business partners may ultimately hold the right to collect installment payments. 
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