Often someone will tell me their credit is poor or insufficient to qualify for a mortgage. My response to these statements is a simple, "I"m the Mortgage Banker, let me run your credit report and let me be the judge of what is sufficient, poor, good, bad or ugly credit." And so often I discover the person's credit isn't anywhere near as bad as they think it is. Frankly, I think that's a good sign when folks are so self-critical; I get more nervous about the person who tells me, "My credit is so good I wont' let you run the credit report!" That bravado is often self-serving and often the mark of a potentially terrible credit report.
What I'm saying to you is this: meet with a Local Mortgage Banker, not a Broker and not a "Regular Banker." Mortgage Bankers historically are more thoughtful in providing quality service and prequalifications. If that Mortgage Banker thinks you're not qualified based on your credit, chances are pretty good she will counsel you on loans you may actually be qualified for at this time, or offer assistance and counseling to help you prepare your credit report for a better score in the future.
Get thoroughly prequalified by a seasoned veteran Mortgage Banker; you'll be glad you did!
You can get a free annual credit report to check your credit at http://www.annualcreditreport.com
Don't pay for the score; your Mortgage Banker will get you a legitimate credit report with scoring for free. The scores offered online are often very different than the scores we use in finance.