Islamic Home Financing: Factors Considered by Home Buyers in Mukim of Ijok, Selangor, Malaysia

Islamic banking has gained popularity in Muslim countries including Malaysia. During times of competition with conventional banks and financial crises, the Islamic banking industry is developing rapidly and going from strength to strength. Therefore, it is important for home buyers especially the Muslims to choose whether to opt for Conventional or Islamic Home Financing in order to secure their financing. The objective of this study is to determine the most important factors considered by home buyers in choosing Islamic Home Financing in Mukim of Ijok, District of Kuala Selangor, Selangor. A survey was carried out by using questionnaires in order to achieve the objectives. The questionnaires were distributed among 50 respondents in the Mukim of Ijok, District of Kuala Selangor, Selangor. The results were analyzed using descriptive analysis. Based on the literature, the factors to be considered by the home buyers include service provision, prohibition of riba, transparency in transaction, Shariah principle, 100 percent financing, lower monthly payment, interest-free practices, location of bank, recommendation from third parties, product range or price, longer financing periods, bank reputation, convenient branch location, and selection of islamic banks. The findings show most of the respondents chose Islamic Home Financing because of the prohibition of riba, Shariah principle, and transparency in transaction as significant factors.