Also, make sure to include all the income you have. If you have any equity in any stocks or other financial accounts, make sure to mention that to the broker as well.

The more money you can put down on the loan, the more likely it is that you can get approved. FHA loans usually only require 3-5% down. They are also usually open to working with people with credit problems.

Renting

1. Advantages: When you rent, you don't have to pay or fix things that break. That’s what your landlord does. Additionally, in many cases, you won’t have to do yard work either. When it comes time to leave, you can pick up and go (especially if you are on month-to-month). You don't have to wait to sell your home, or go through the hassles. You can put the money you would have spent on a down payment into investments and watch it grow.

2. Disadvantages: There’s no getting the rent money back. It is gone forever, and not even growing as an investment in real estate that you can make money on by selling. Landlords can be slow in fixing things, and you are usually forbidden from fixing it yourself, should you make things worse through ignorance. You can't alter things about the home and landscaping that bother you.

Home buying

1. Advantages: You are building equity and making an investment. You can alter the home any way you wish, making it more comfortable or desirable. Home improvements result in increased value. You receive a tax deduction based on the amount you pay in mortgage interest. The home is yours, and a valuable asset that you can borrow against in tough times.

2. Disadvantages. If the housing market goes south, then you might take a loss, or not be able to sell at all. Then you are saddled with a large monthly payment, even as you try to make a start somewhere else. It can get expensive to maintain the home and pay for all of the repairs yourself. If you don't have the money, then you have to do without repairs. 

Rent v. buying a home calculators

One way you can figure out the financial advantages is to use a calculator that can give you a ballpark idea of which would be better for you from a strictly financial standpoint. You can put in the numbers that best describe your situation and receive an analysis of whether it would be better to rent or buy.

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The average rate of interest on mortgage loans continues to fall and has been under 5 percent for almost all of this past year, with this recent round of rate cuts seen as the lowest for borrowers in years. The reason, many borrowers today have bad or at least less than perfect credit scores. Still a borrower with less then perfect credit an jump through a few hoops and get a fairly decen rate on a loan.