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Mortgage in Islam and The Law

Definition of mortgage in Islam of the word known as Pawn or pawning. Definition of mortgage in islam is giving an item, object or goods that having value from one person to another as an dependents in debts. In the mortgage or pawning there is a item or object that used as reinforcement in these debts. Items, Objects or goods as an amplifier in debts is known as Borg

In islamic mortgage, Borg in Islamic jurisprudence called Ar-rahnu. Objects, goods or items that serve as the borg will be taken by people who owed if the debt has been paid. If the specified time has arrived payments and unpaid debts, then the borg or valuable goods or objects that can be used as a substitute for debt repayment or borg it can be sold for payment of debts and if there is excess money from the sale of goods or object or these borg objects, the excess will be returned to the owed

About pawning or islamic mortgage by using precious item, goods or objects called borg, Allah. says:

وإن كنتم على سفر ولم تجدوا كاتبا فرهن مقبوضة فإن أمن بعضكم بعضا فليؤد ٱلذي ٱؤتمن أمنته وليتق ٱلله ربه ولا تكتموا ٱلشهدة ومن يكتمها فإنه ءاثم قلبه وٱلله بما تعملون عليم

And if you are upon a journey and you do not find a scribe, then (there may be) a security taken into possession; but if one of you trusts another, then he who is trusted should deliver his trust, and let him be careful (of his duty to) Allah, his Lord; and do not conceal testimony, and whoever conceals it, his heart is surely sinful; and Allah knows what you do.( al-Baqara: 283)

The law of borg and pawning ot mortgage (islamic mortgage) is sunna or permitted for debt (someone who receiving borg) and permissible for those who owe handed borg.
A few things has to be concern in the mortgage or pawning is to be fulfilled Pillars of mortgage. Pillars of mortgage that must be met in pawning are as follows:
·    Ada pihak atau Orang yang menggadaikan atau yang menyerahkan jaminan.
·    Ada pihak atau Orang yang memberi utang atau menerima jaminan. Kedua orang diatas disyaratkan orang yang berhak membelanjakan hartanya.
·    Barang yang digadaikan jaminan yang dikenal dengan istilah borg. Borg disyaratkan tidak rusak sebelum sampai kepada waktu pembayaran utang.
·    Utang atau sesuatu yang menjadi adanya gadai.
·    Akad (Ijab Kabul).
  • There is a person submitting the mortgage or guarantee.
  • There is a person who gives or receives collateral debt. Both of the above required by the person entitled to spend his money.
  • Goods pawned collateral known as borg. The Borg must Required was not broken prior to the time of payment of debt.
  • Debt or something into existence of mortgage.
  • Contract (consent granted).
In islamic mortgage, Between the borg and mortgage or pawning there is a difference in the use of the goods or object as guarantee. In borg, borg Utilization remain on the owner item, while mortgage utilization moved to  to receiver of pawn.
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