What does a barely-able-to-buy-a-home Buyer look like?

 Mortgage/Finance

I have a good idea of the parameters used to tell whether or not you're able to buy a home.  It's the sort of thing I see, experience and read about every day.  It occurred to me today that you may not know such things but would like to know more about what it takes to buy a home.

Many people I work with are surprised at how easy it is to qualify for a loan.  Many of those same people also take great care of their credit history, pay their bills on time, and have a general idea of how much they can/want to afford.  (Yes, there is a big, big difference between being approved for a certain amount of loan and being comfortable with a certain monthly payment.  Always choose the comfort.)

Today I received the following email from some lender I have never spoken with.  It reminded me of all the people who'd purchased homes in the last 7-8 years who only qualified for the loan because of this crazy incentive or that ludicrous promotion.  Surely you've read about the state of the National Real Estate market and the high numbers of foreclosures.

So, gentle reader, here is the face of someone who could barely qualify for a loan but, IMHO, probably should wait until they're in a better position:

Do you have a borrower that doesn't have great credit, has a recent history of paying their bills on time, and can't quite qualify for FHA?   Our Flexible Solutions program is the perfect opportunity for you.

• Collections do not have to be paid as long as they don't impact title.
• 30 year fixed, conventional financing.
• Rates starting around 7.25, and never higher than 8.0% (APR varies based on loan amount) 
• 3% in closing costs may be paid by the seller.
• Credit scores as low as 575 (middle) and possibly lower with strong compensating factors
• NO PREPAYMENT PENALTY!
• Closing costs = 1% origination, $300 appraisal, and $550 processing.
• Bankruptcy must be 2 years old, foreclosure must be 4 years old.
• Borrower minimum contribution is $500.00
• NO INCOME RESTRICTIONS

The market might be tough, but chances are, you have a good buyer that fits in these wide parameters and wants a flexible, affordable mortgage.