20% down or 25% down for a $90k property?

[Chingju Hu]

Hi BP: I'm about to buy a property for $90k, and I'm debating whether to put 20% or 25% down although there's only $4500 difference.

The lender quote me: 20% down=> $18000 down and borrow $72000, 4.25% interest rate (conventional 30 yrs) => $354 PI monthly

And they say if 25% down => $22500 down and borrow $67500, the rate is slightly lower but will let me know the actual number on Tuesday because it's a labor day weekend. Assuming it's 4.125% => $327 PI monthly. 

Now I'm leaning towards putting 25% down because I feel better not borrowing too much, and it's only $4500 more. I still have enough cash reserve. Monthly cash flow is $27 more, CoC is slightly lower but really not much difference and I can do with that.

My hesitance is that most of ppl I see here maximize the leverage and they will go with 20% instead of 25%.

I don't know if it's really the case in the real world because I don't have many investor friends in my circle.

So BP, what do you say? with only $4500 difference, which one is a better strategy?

.

[Account Closed]

Certainly 20% is better, so you can use the extra $4500 as part of the down payment to purchase the next investment property.