Can't get approved for home loan, now what?

Ok, here is the situation... I am gettting married in September and my apartment lease runs out at the end of July, so my wife to be and I are moving in together. However, we both currently live and work in different cities. So, we need a place in-between to live. She has pets, so an apartment is out of the... show more Ok, here is the situation...

I am gettting married in September and my apartment lease runs out at the end of July, so my wife to be and I are moving in together. However, we both currently live and work in different cities. So, we need a place in-between to live. She has pets, so an apartment is out of the question.

I went to a real estate place and got "pre-qualified" for $75,000. However, they needed some more documents (W-2's, pay stubs). I submitted those and my fiancee submitted her information. We found a great house for $95,000. Now, it turns out we are both rejected for a loan because our "debt to income" ratio is too high. We both owe more than we make. My credit score is in the mid 700's, while hers' is in the mid 600's.

Whats our chance of going somewhere else to get approved and purchase our dream home?
Update: As far as a payment goes, we can afford a payment. My rent is $575 a month and my fiancee currently lives with her parents and pays about $200 a month. The payment we were esitmated to get with the house we wanted was around $675.
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