If you are first time buyers,you can look into an FHA loan which is not credit driven and requires only 3.5% down. You will need to demonstrate a 2 yr. work history,sufficient income to meet not only the monthlynote but taxes,insurance and maintenance. A conventional loan requires a good credit score and at least 20% down. As first time buyers,you would be eligible for the $8000 tax credit if you buy this year. your best bet is to sit down with a reputable local mortgage broker,discuss your options and get yourselves pre-qualified before you begin your house hunt. That way,you know what you can spend and when you find what you want you have your funds guaranteed and can jump right in to make an offer.