You and your significant other have found the perfect home, but getting the mortgage financing may be a lot trickier than you thought.

It may be time to head down to your local Starbucks at midday and ask one of the many people popping antacids and leafing through online job search sites -- one of them could be your mortgage broker.

"I've been in this business more than 25 years and I've never seen conditions so bad," says Richard Scholtz, a Seattle mortgage broker. "A few years ago we had 40 loan officers, now we're down to six."

Home loans, which anyone could get with just a pulse a few short years ago, are now parceled out carefully by banks that are scrutinizing potential borrowers as though they were adoptive parents.

"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, 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."
"I've pulled six credit reports in the past two weeks, and there's only one I can work with," says Sholtz. "These are people with good incomes, stable job histories, but either their scores are too low or, more likely, their debt ratio is too high."

So you think that credit card indiscretion from your college days is long gone and forgotten right? After all, the collection calls stopped a few years ago. What you may not know is that bad credit listings can stick to your credit reports for seven years or more, popping up when you apply for big items like a mortgage. The majority of loan brokers can help you if your score average is at least 620. The subprime mortgage market has left the building, but if you're below 620 and above 560, you may be able to buy with an FHA or VA government loan.