15 or 20% down

[Michael Braatz]

Hey all,

My partners and I are working through our first offer currently and two options we have through a conventional mortage are 15% or 20% down.

I realize that the decision will most likely be a subjective one, but I would like to get some opinions on which option you would choose and the reasoning behind it.

15% down ($9,750) 4.625%, pmi = $13/month, $297/month mort+ins,  $300 cash flow/month

20% down ($3,000) 4.75%, $271/month mortgage.   $275 cash flow/month

My thinking;

We would most likely not pick up another property for upwards of a year or more.  In one year with the 15% we would save about $2,950  in cash.  Our limiting factor for traditional financing is cash on hand for downpayment.  We are generally looking for properties in the 60-100k range.  The question I keep asking myself is will that slowly decaying $3k in cash saved jumpstart our next properties fast enough to outweigh the slightly higher cost longterm.

Thanks in advance!

Mike

[Chris T.]

@Michael Braatz

personally, I doh't like PMI as it doesn't benefit me, so I would choose the 20% down.

However, it sounds like in your situation, that $2950 could help you finance another cash flow property soon. So you should probably opt for 15% down.