I know. I remember back in '06 listening to a business week podcast where they said "Wall Street has found a way to slice up bad debt and create grade A debt" and thinking,"how the hell is that mathematically possible?" Turns out it wasn't.
Lol. I had only a 700 credit rating at the time, had been self-employed for over 3 years, and was approved for a no-doc loan on a $300k condo with only 10% down. I actually could have afforded it, but there was no way for them to know that and no reason to assume it either.
If you had been self-employed for three years, then you had properly found a way to make money by yourself (or you would have starved to death before) so what risk is there to lend you the money?
Well, you can scrape by on a lot less than the income required to pay that mortgage when you live in Ohio. And with no documentation and a less than stellar credit rating, plus little down, they were nuts to grant it to me.
Luckily for me I didn't purchase the condo, as the housing market there took a nosedive, and I'd currently be unable to sell for less than I'd owe the bank.
