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Fatwa CenterWants to mortgage a house he gave to his daughter
Question
I want to give Hibah (gift) for my house to my daughter. My question is that whether I can still charge the property to the bank to obtain the bank's financing after the Hibah has been given to my daughter.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
If the house that you wish to gift to your daughter is still in your possession and your daughter has not yet possessed it, then you can do whatever you want with it, you may mortgage it, or sell it, or rent it, or do whatever you want with it because it is your property. The jurists
stated that a gift becomes effective when the person to whom it was gifted receives it.
However, if the house is already in possession of your daughter, then you can not mortgage it except with her permission. If she allows you to mortgage it, then it is permissible. The jurists set a condition that a mortgaged item should be possessed by the person who mortgages it, or that he is permitted to do so. For more benefit, please refer to Fatwa: 83266 about the ruling of gifting children.
As regards whether it is permissible to borrow money from the bank and mortgage the house, then if the loan is without interest, then there is no harm to borrow money from the bank and mortgage the house according to the conditions stated above. But if the loan involves interest, then it is forbidden as Allaah says (which means): {Allaah has permitted trading and forbidden usury.}[Quran 2:275]. In addition to this the Prophet 
said: "Allaah has cursed the one who consumes Ribaa (i.e. usury or interest), the one who gives it to others, the one who writes it down and the one who witnesses it. He said: "All of them are equal in sin." [Muslim] Please refer to Fatwa: 85046 for the ruling on borrowing money with interest.
Allaah knows best.
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