Is it permissible for me to take out an interest-bearing loan from a bank to buy a home for my family, knowing that our financial situation is difficult and I fear I may be compelled to do so?

Borrowing with interest (riba) is forbidden and is only permissible in cases of dire necessity. Necessity is defined as a person reaching a point where, if they do not partake in the forbidden act, they will perish or be close to perishing. Whoever finds a dwelling to live in—even if rented—and is able to afford it, is not considered in dire necessity to borrow with interest. There are lawful alternatives, such as the transactions offered by Islamic banks. And whoever fears Allah, He will make for him a way out and provide for him from where he does not expect.