Your buying power is determined in part by what the monthly mortgage payment will be. That payment is derived in part by what the interest rate of your new loan will be.

One of the best ways to lower that payment (and increase your buying power) is to ?buy down? the interest rate. Sometimes a ?point? at the close of escrow can reduce your interest rate by as much as a half. But as a buyer, you may not always have the extra cash to buy down the rate.

Depending on the market conditions, you may be able to negotiate that the seller pays for some of your loan closing costs. We call this ?seller credits?. But instead of spending those credits for smaller items like appraisal fees or credit report fees, you would be better off using those credits to buy down your rate. The result could mean months or years of reduced payment or the ability to qualify for more buying power with the same payment.

Ask your lending professional for more information on how to do this.