How to Find Mortgage Financing

"Overall, we call it the 'flight to quality,'" says Scott Coffman of Kailua Mortgage which has three offices in Hawaii. "The lender wants to see your down payment money, they want to know where it comes from, they want proof of your income and they want to make sure the house is worth the price."

If it looks like a conventional mortgage won't work for you, don't get too stressed about going the FHA route. "These loans used to have a bad reputation, but now they're a lifesaver," says Scholtz. "You can get them if your credit is poor, if you need a co-signer, if you have little or no equity. On the downside you're paying mortgage insurance, about half a point each month."

If you've reached the point where you have the home picked out, no loan in sight and your mortgage broker is too busy checking out careerbuilder.com, there is another route to finding the funding: go local. Every area has small banks, credit unions and savings and loans that will lend mortgage money.

"You do business the old fashioned way and personally talk to the loan manager. He or she usually has the discretion over whether you'd be a good risk," says Scholtz. "You might pay a little more for the loan, but it's a loan you wouldn't have otherwise."

If that doesn't work, it's not time to give up the home-buying jones just yet. Try retargeting.

"If you're really stretching to meet the new loan requirements and you feel you deserve it since your colleagues bought similar homes a few years ago, take a deep breath and look around the neighborhood," says Coffman. "Pick a less expensive home you won't have trouble qualifying for. The real estate market is still good, and it's likely to be a bargain that will appreciate just as much as your dream home."

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