Which Type of Mortgage Program Should I Go With?

[Craig Alger]

Hi there, I'm brand new to Bigger Pockets and Real Estate Investing. To begin my real estate investing career, I am going with the BRRRR strategy on a single family house. While I have dozens of forum-worthy questions, the only one I will pose here is, "Which type of mortgage program is best?"

I currently have 3 options:

1. FHA with a 3.5% down payment and a 3.625% interest rate

2. Conventional with a 5% down payment and a 3.75% interest rate

3. A credit union's portfolio mortgage with a 1% or 0% down payment and a 5.13% interest rate but no PMI.

The monthly payment for the portfolio mortgage option is $100 more than the conventional route and $80 more than the FHA route. So for less of a downpayment I reduce my potential for cash flow, but I keep my cash for rehab and reserve funds. Which mortgage route do you recommend? Thank you.