Down payment for home buying

[Julie J.]

Hi BP

It may be common sense but I am trying to figure out if 20% down payment on a home by taking out HELOC is better or 3-5% down and paying PMI is better?

Either way, I am paying interest, but with HELOC comes with $4k cost to get it. And house in my area appreciates min. 5% a year.

Someone please advice.

[Brad Hammond]

Hi @Julie J. I think you should see how much each option will cost. I can't remember how much PMI is but I'm sure you can figure that out quickly or ask your lender.

Maybe I'm missing something but I believe HELOCs and PMI are only on personal residences. Is this for a second home?