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By BankingMyWay.com Staff
There are numerous factors that go into calculating a monthly mortgage payment. If you’re trying to buy a home, but find that the monthly payment is more than you can afford, there are some things you can try to negotiate.

These strategies may not work for every situation, but they are certainly worth a try.

1. Negotiate on the closing costs. While sellers can no longer help buyers with their down payment (thanks to an FHA prohibition on this arrangement), they can still kick in to pay the closing costs.  In this buyer’s market, this arrangement is a common negotiating point. Eager sellers are often willing to pay the 2% to 3% that closing costs come to in order to unload their property. This can help borrowers lower their monthly payments by adding what they would have paid in closing costs to their down payments, thereby reducing the loan amount.

2. Negotiate a seller buy down. Besides traditional closing costs, buyers can also negotiate for sellers to buy down the buyer’s mortgage rate. This is often a temporary arrangement. For example, a buyer might ask the seller to do a two for one buy down, which means the seller will pay to lower the mortgage rate two percentage points in the first year and one percentage point the second year. A buy down agreement then becomes part of the closing. This arrangement can significantly lower your monthly payment for those first two years.

Here’s how it works: Say your loan amount is $200,000 and you get a 30-year fixed rate mortgage at 5%. Normally, you would pay $1,073.64 a month for your mortgage. With the buy down, however, in the first year your rate would be 3%. So your monthly payment is $843.21, a savings of $230.43 per month. In the second year your rate would be 4%, and you would pay 954.83, a savings of $118.81 a month. In the third year, your monthly payment would return to normal. You will have saved a total of $4,195.68 and that would be the upfront cost to the seller.

3. Negotiate seller paid maintenance fees. If you are buying a condo or a property with a homeowners association (HOA), you will have to pay monthly HOA fees on top of your monthly mortgage payment. To lower you monthly housing costs, you can negotiate to have the seller prepay a certain amount of those fees. One year’s worth of HOA fees are a common arrangement.

4. Alter a new home design. If you are purchasing a new home, you may be able to lower the purchase price by altering the design to lower building costs. For example, you may be able to choose lower-grade finishes like carpet instead of hard wood flooring or laminate countertops instead of granite. On a 30-year fixed rate mortgage at 5%, for every $20,000 you take off the purchase price, you save about $107 a month.

— For more ways to save, spend, invest and borrow, visit MainStreet.com.