Are banks lowering their requirements for home loans?
How is it in this economy and with the banks tightening their belts that the person/situation I'm about to describe is possible? A relative asked me to let her know if I am aware of any houses she might be interested in. She is preapproved for up to a 98,000 loan. Now I live in an area where this is the price of a fixer-upper or starter home. She is single with two kids and makes maybe $10 hr. She is a nurse's aide so I'm guessing she probably makes less than that. The starting wage for a nurse's aide in my area is $8 hr. She does not receive child support for either child. She has been at her job for less than six months. Before that she was collecting unemployment.
She filed bankruptcy 9 years ago (I know it would be off her credit report by now but I doubt she has established much credit in that time) She made payments on land and a trailer but it wasn't through a bank so there wouldn't be a record on her credit report. She has no assets. She might have a down payment of $2000 at most (probably tax rebate money) I thought your house payment should only be up to 33% of your income. Why would a bank give someone with hardly any income a loan for almost a hundred thousand dollars? Now I realize it is just a preapproval but it blew my mind. I know there are still programs (goverment) like USDA Rural Development loans and things of that nature but I thought even those require a high credit score and a 3% down payment. Have things changed?