15% with PMI vs 20% without

[David Rutledge]

Good afternoon,

I am a beginner investor and I have been researching and sourcing these forums every step of the way. I recently put an offer on my first property and it was accepted. I am now in the process of getting the house appraised etc with my lender.

I was hoping to get some advice from other experienced investors on what interest rate I should go with.

My lender is offering three options 15%, 20% or 25% down. I have the available capital to put down any of the above but I do plan to obtain additional properties over the next 12 months so having that extra cash available will obviously be very helpful.

With 15% I will need mortgage insurance but the rate stays the same as if I put down 20%. It will cost me about 3000 total before my mortgage hits the mark where I no longer need the PMI than if I put the 20%. If I wanted to put 20% I would need to put down an extra 8000 so I am really debating whether I want to save that 3000 and have that capital for a potential additional purchase or do I want to save the 3000 and just put the 20% down.

25% is not really an option as I will be tying up too much money.

As I mentioned I am new to all this and although I am leaning toward the 15% option I would love to hear some opinions from investors or people who may have been faced with this decision.

Any advice you could provide to someone who is just starting out and wants to build their real estate profile while still saving the most money would be greatly appreciated.

Thanks so much for your time.

David