Two family first time buyer

[Juan Araujo]

I’m so happy to be with you all!. I need advice as to what type of loan to go for a property I got an offer accepted at $525,000 in Bloomfield NJ taxes are 12,000 a year. I will be living in the 1st fl and the 2nd fl tenant has 3 year lease rents at 2,200 a month. I could do conventional loan 10% down payment but If I apply for first time buyer I would only need 3.5% down payment which would free up my cash to invest it somewhere else should the opportunity arise. Theres nothing wrong w the house everything looks good so I don’t expect any expenses for now so Im trying to cash flow as much as I can here market is very tough in this area. Any advice is greatly appreciated.

[Scott Stewart]

I would double check with your lender that they'll do conventional with only 10% down on a two family. I believe guidelines still require 15% down on a conventional, even if it's owner occupied. If that's the case, you'll be going FHA either way and the decision really comes down to whether you want a lower monthly payment or more cash in hand after the purchase. Also keep in mind with an FHA loan you'll be stuck with the mortgage insurance for the life of the loan. You can always refinance out of the FHA loan down the road when appreciation or improvements increase the equity you have in the home.