You don't have a down payment because that is the money you owe on your student loans. You will not get a mortgage with student loan charge off. It is considered a federal debt since you are paying SALLIEMAE.
Pay off your student loan. Then save as much as you can for a year. Your credit will go up since you have a satisfied charge off, you no longer owe the feds money and time has passed.
1/3 of the mortgage approval is willingness to pay. You need to be able to prove to an underwriter that you are willing to pay your debts.
In the meantime, you have any credit cards debt you can pay down?
Do you/can you start making payments on them - however small it may be?
If so -- that alone can boost you pretty well.
Also, like Elliott said, if you have other debt-- keep the balances to approx 50-60% of the limit.
That again should bump you well.
When we are approving a loan/borrower, we look at 4 areas.
1/ Credit (if you are 570, then you are on the lower side of things). Scores range from 350-850.. Also, how much debt do you carry.
2/ Income -- how stable is it? How long have you been there? Are you commission based/salary etc?
3/ Assets -- down payment. You are great in this respect. Also, we look at money left over after you buy.. we call them reserves, and lastly,
4/ Property -- what type of property? Single family, condo, flat, duplex, etc.
If you are buying/refinancing a single family home that you are going to live in (#4), you have a large downpayment (#3), you have a great job and income (#2) -- but your credit is iffy -- then you can be ok.
We lend to borrowers down to 580 (if you are at 570, 580 is a hair away in the lending world -- it is likely quickly achievable) -- and with a large downpayment - you are even that much more of a stronger risk.
Feel free to visit my site at http://www.lendwithjason.com for more info and help.
I have been in lending for 11 years and am based in Bedford, NH.