Hi,
Have you heard of vendor finance or a lease option. These have been around for years and are a great alternative. Vendor finance is where the owner of the house you want to buy lends you their money based on the value of the home, ie.they take out a loan instead of you, obviously for a slightly higher rate than they are paying. You can then either refinance in a couple of years when you qualify for a loan and pay them out or this can continue as long as you both like. The reason a seller might consider this is they can have an income stream and not have to pay capital gains tax straight away, particularly if they own the home outright.
A lease option is where you rent a place but have a contract that you can buy the place in the next few years at the price agreed on today. This also creates a payment history which you can give to the bank in a year or so which makes it more likely to obtain a loan. Also a small percentage of the rent is sometimes credited from the purchase price when you buy. You can check out http://www.urhome.com.au or google 'we buy houses'. Both these places do these kinds of deals. It's becoming popular for people like yourself who don't meet the neat little boxes the banks expect. You are not alone in your frustration. Good luck. Also a mortgage broker is more likely to direct you to an institution that will approve you. My husband is self employed and I work part time but we have a great mortgage broker here in melbourne who got us a loan for our PPOR.
Meg