What will it take to qualify for a home loan during the credit crunch?

What will it take to qualify for a home loan during the credit crunch? »Play Video

EUGENE, Ore. - Wall Street's meltdown has forced home lenders to tighten their belts with potential buyers. Just how tough is it to get approved for a mortgage? Lenders aren't handing them out to just anyone, but if you have good credit and can prove a stable income, you should get that mortgage.

Looking for a piece of real estate can be scary during an economic crisis.

"I'd rather know for sure before I make a commitment, especially now that you see everybody else that have all these problems and there like stuck with a home," said Rosalia D'Amato, a renter from Bandon.

D'Amato learned without stability- your chances of getting a loan are slim to none.

"It's like putting a house on a sink hole, or something. There's no real foundation," said D'Amato.

But lenders are still finding people who qualify for a home mortgage. If you're looking for a loan, you need to ask yourself a few questions.

First, what's your credit score? If it's 640 and higher, you're on the right track.

Second, is your job and income stable? If so- prove it.

"We had a little run here in early part of the 2000s when borrowers could be qualified with very little documentation- and many cases no documentation," said David Shirk, President of Frontier Investment Co.

Finally, do you have enough money for a down payment? Expect to pay anywhere from 3 to 5% of that loan.

"It's a great opportunity to buy a home right now," said Russ Bernardo, Senior Loan Originator of Frontier Home Mortgage.

With decreasing home prices and home mortgage interest rates averaging 6%, the challenge is qualifying for that home. And if your having problems in the market, Shirk said don't expect the government bail out to help.

"I don't think the 700 billion dollars is going to do a whole lot for the average home owner or home buyer, " said Shirk.