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Ready Life Changing The Homebuying Narrative

CEO says that the credit score system is an out-of-date barrier to people of color

Sarah Wolak Headshot
Insider
Sarah Wolak
Homebuying narrative

For decades, home ownership has been predominantly white. Black-owned fintech company, Ready Life, is aiming to change the barriers that prevent people of color from owning a home.

To achieve this goal, Ready Life is launching a mortgage lending model that relies on good rental payment history — instead of a credit score — to qualify buyers for home purchases.

Buyers will have to use Ready Life’s banking system via a Visa card, which acts as debit, for a minimum of six months to prove their good rental habits and to have a chance at getting approved for a mortgage. While this is still another form of credit review, Ready Life says that they do not assign scores to customers.

Ashley Bell
Ashley D. Bell, CEO of Ready Life

Ashley D. Bell, CEO of Ready Life, said that he was inspired to create a mortgage lending platform for people who have had trouble in the past with owning a home. Over 50% of Black people, he said, go to sleep at night in a home that they do not own. With more minorities entering the market, Bell says that this statistic is staggering. According to the National Association of Realtors, in 2021, the homeownership rate for Black Americans (43.4%) is lower than in 2010 (44.2%) and nearly 30 percentage points less than White Americans (72.1%).

“The credit score system is outdated. A three-digit number shouldn’t determine the standards for homeownership and it shouldn’t put a title on anyone, especially since circumstances are individual not aggregate.”

– Ashley D. Bell, CEO of Ready Life

Bell says that while Ready Life accommodates minority homebuyers facing barriers, they also cater to gig economy workers who don’t have traditional W2 work forms to prove their incomes. “The traditional credit score system puts entrepreneurs at risk, too,” Bell said.

Bell says that Ready Life’s platform will track on-time rental payments as a form of credit review. Bell said that a Ready Life account holder who pays their rent on time and provides lease details to Ready Life that are confirmed with the lessor establishes a form of reliable credit. Bell reminded that sometimes, more often than not, rent payments are equal to or higher than most mortgage payments. “The goal is to improve minority ownership culture as they start to become the majority,” said Bell.

Ready Life screen

Licensed in 50 States

Ready Life

Ready Life’s platform was set to launch in September, with the initial goal for the campaign to pre-approve 100,000 mortgages. The company says that mortgage rates will stay competitive. “We are empowering our customers by using their own data to show lenders consistent payment and cash flow history as the basis for approving home loans,” said Lola Kress, Ready Life’s media representative. “Banks and secondary market lenders are looking for mortgages that align with ESG directives, whether it’s through CRA programs at banks or ESG commitments in private equity.”

So far, Ready Life is licensed in 48 states, but Bell says that they will reach all 50 by the launch date. The Ready Life Visa is aimed to also track and be useful for everyday expenditures. “If people make their payments on time, then they’re likely to pay a mortgage on time,” Bell said. Bell says that users must have the app for a minimum for six months before they approve for a mortgage. However, approval length varies by household. Mortgage amounts are capped at customers’ previous rental payments.

Homebuying

Bell says that Ready Life will act as the underwriter and partner with other banks who will then buy the mortgage. While Ready Life will assist buyers with down payment and closing cost assistance, mortgages will be held by banks and private equity groups on the secondary markets. So far, Ready Life is partnered with banks associated with JAM Special Opportunity Ventures, an affiliate of Fintop Capital. Other partnerships include Figure, a financial service that uses blockchain.

Mike Cagney
Mike Cagney, executive chairperson at Figure

“Figure is an enthusiastic investor and technical partner in ReadyLife. We share Ashley Bell’s vision of delivering fair and equitable banking solutions to customers traditionally ignored by the big banks,” said Mike Cagney, executive chairperson at Figure. “With features that range from a better online banking experience to mortgages that rely on rental history rather than credit scores to merchants that can avoid interchange and keep money in their communities, Ready Life has the opportunity to significantly improve the lives of consumers. The Ready Life team is leveraging Figure core banking and mortgage technology, along with its payments infrastructure, to build a truly disruptive startup.”

Bell says that despite its unconventional method of getting a mortgage, Ready Life considers mortgages achieved through their platform to be low risk, considering that on-time large rental payments directly correlate with mortgage payments.

This article was originally published in the NMP Magazine December 2022 issue.
Sarah Wolak Headshot
Sarah Wolak,
Staff Writer
Published on
Nov 30, 2022
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