20% down vs 25% for rental property

[Bhavik Uppalapati]

I need a quick suggestion , i am planning to buy a investment property in Mechanicsburg , PA .I am planning to buy townhouse for 2,14,000 for which i am planning to make a down payment of 20%, how ever i see that making 25% down will lower my interest rate by $90 per month , But for that i have to pay an additional $10,000. Is it better to pay 20% down and save $10,000 for my next one , as I am planning to buy one more in this year or make 25% down.I dont have $10,000 handy but i can get the money close to my closing date.I am thinking if i have to squeeze my self or play it safe by paying more interest rate, Amortization is coming close to $10,000 of interest and an other $10,000 in principle over period of 15 years if i am planning to pay 20% for 15 years.Please suggest.

Thanks

[Nik Corbaxhi]

why don't you look at 30 year options? is this a buy and hold property? a 30 year option with 20% down. Your payment will be lower, meaning more cash to you every month. If you are looking to grow, your strategy should be to get as much cash coming your way as possible. The only way to do that is to lower the payment as much as you can to capitalize on gains and build your portfolio.

If you are thinking "look at the interest that I am paying over 30 years", that should not apply here as you are renting this property, so the interest is getting covered by your tenants.

Hope this helps.