3 Tips on How to Keep Your Mortgage Payment Affordable with Armen Manokian

3 Tips on How to Keep Your Mortgage Payment Affordable with Armen Manokian

  • James Bowerman
  • 10/18/22

In a high interest rate environment, many home buyers are looking for ways to keep their monthly mortgage payment affordable. At the time of writing this, interest rates for home loans are hovering around 7%. This is affecting affordability, and can cost some buyers hundreds of dollars per month. What options do you have to combat this? Armen Manokian and I are using these three strategies to lower your mortgage payment.

1. Buy Discount Points

As the market cools, we’re seeing fewer multiple offer situations, and more opportunities to negotiate. One thing that many people don't think about is negotiating a seller credit and using that money to buy discount points to reduce your mortgage interest rate. One discount point typically costs 1% of your loan amount. So, if you're borrowing $200,000, one discount point would cost $2,000. 

This can be an extremely effective way to save money on your purchase, and it's something that you should definitely keep in mind when you're negotiating your deal. Discount points are a fee that you pay upfront in order to get a lower interest rate on your mortgage, and a seller credit is essentially a concession that the seller gives you off of the purchase price of the home. If you can negotiate a seller credit and use that money to buy discount points, you can significantly lower your overall interest rate and save yourself a lot of money over the life of your loan.

2. Use a 2-1 Buydown Loan

A 2-1 buydown loan can be a great way to reduce your interest rate temporarily and then refinance the loan when interest rates come back down. With this type of loan, in the first year your rate will be reduced by 2 points, in the second year it will go up 1 point, and then the third year it increases to the original rate.

This can be a great way to save money on your interest payments during the first couple years of the loan. However, it is important to look at the year three rate and make sure it’s not going to be burdensome on your finances. When interest rates come back down, you can refinance your loan to the current market rate.

3. Audit Your Monthly Expenses

This last strategy could offset a higher mortgage payment, and potentially increase your qualifications to get you a better interest rate. To reduce your monthly expenses, start is by auditing your subscriptions and loans. Take a close look at streaming services, gym memberships, and other recurring payments you may be making. Are there any that you can cancel or scale back? 

Next, look at your car loans and credit cards. Is there any way to consolidate or pay off your debt more quickly? By reducing your monthly expenses, you can free up more money to put towards other debt or savings goals. And, by improving your debt to income ratio, you can also improve your financial health overall.


These three tips can help you lower your monthly payment and keep your mortgage affordable. Connect with Armen Manokian with Coastline Mortgage to learn more about the 2-1 Buydown Loan or start your loan application. Be sure to check out our blog for more real estate tips or use our website to search for a new home. Have any questions? Contact me and I'd be happy to help!

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