Loan Option Advice for House Hack in Alexandria VA

[David Cherkowsky]

Hi All,

I am purchasing a home to house hack in Alexandria VA. I have two loan options, and I am interested to hear thoughts between the two. They are very different, which is making me struggle with comparing them. Purchase price of the home is $800k.

Option 1

Conventional loan

20% down: $160k

Points: 0

Cash to close: $170,092

Rate: 6.875%

PMI: $0

PITI: $5004

Loan Amount: $640k

Option 2

FHA loan

10.625% down: $85k

Points: 2.5

Cash to close: $120,455

PMI: $296.30

PITI + PMI: $5,537

Loan Amount: $715k

With option one, I am bringing ~$50k more to the table, but my monthly payment is $500 less and my loan amount is $75k less. I imagine this will help me with a refinance in the future. I imagine refinancing option 2 would be more difficult due to the higher LTV. However, I do like the idea of bringing less cash to the table.

Any thoughts between these two options? Is one a clear choice and I am having trouble seeing it?

Thank you.