...someone I know just came within days of securing a $104,000 mortgage on a short sale.
He makes $14/hour ... Has never paid rent in his life(moving out of his parents at age 43)..got a 17% car loan from Toyota some 4 years ago .... But with property taxes, his payment was gonna be like $1100/month!
He was only gonna bring the FHA minimum to closing. His net two week paycheck is about $855.00
The bank had just soaked him for $500 for an appraisal, and it panned out....he has $2,000 in earnest money still out there....but...he is gonna eat the $500, and maybe some of the earnest money as a "not showing good faith" penalty, because he is backing out of the deal since a similar house just went on the market right down the street for $73,000.
The only condition on this loan, almost approved; keep a $3100 balance in your checking account.
How the hell can a bank give out a loan, when the payment exceeds 50% of a man's net pay???