Are Items Bought with Impermissible Loans Haram?

Answered by Shaykh Jamir Meah

Question: Assalamu alaykum

If one borrowed money off a family member for a house and the family member’s money was from a haraam source, but has now been paid off in full with halal money, would this mean when selling the house, the money would be haraam?

Secondly if someone took a sinful interest based mortgage and paid it off, would this also mean the house is haraam or the money is when sold?

Answer: Wa’alaykum assalam. Thank you for your questions.

1. If the lender owned a mix of money from halal sources and haram sources, then it is permitted to take money from them, although somewhat disliked. If you are certain that the actual money given to you was from haram sources alone, then it would have been prohibited for you to have taken that money in the first place.

However, since you have paid the loan back with your halal money, the property in of itself is not haram, and therefore the money made from its sale would be halal.

2. As above, the sin is in the initial agreement and continues until the debt is paid off. The house in of itself is permissible as is the money from its sale.

Lastly, it is advisable to pray two cycles of Salat al Tawba (the Prayer of Repentance) and resolve not to enter into such transactions in the future.

May Allah grant you every good in this life and the next, insha’Allah.

Warmest salams,
[Shaykh] Jamir Meah

Shaykh Jamir Meah grew up in Hampstead, London. In 2007, he traveled to Tarim, Yemen, where he spent nine years studying the Islamic sciences on a one-to-one basis under the foremost scholars of the Ribaat, Tarim, with a main specialization and focus on Shafi’i fiqh. In early 2016, he moved to Amman, Jordan, where he continues advanced studies in a range of Islamic sciences, as well as teaching. Jamir is a qualified homeopath.