0% vs 20% financing

[Marcell Salmond]

good afternoon everyone. was wondering if I could qualify to get 0% financing on getting a duplex to house hack and only kick out closing costs (interest rate would be 5%) would that be better or should I go with 20% down to have some equity and a slightly lower mortgage? I have roughly 35k in cash reserves at the moment. if you could be so kind to explain why on your answer I'd appreciate it. Thank you and have a great day.

[Jason Little]

Consider the long term implications of the two loans, you will have a higher interest rate with more in PITI payments every month if you put 0 down, and your long term costs will thus be significantly higher as you are now paying interest on that chunk of equity you could have banked.. Depending on how long you plan to hold the property it could be more beneficial to hold that cash up front (short term) or to keep long term costs as low as possible and plan to live in the home for a longer time.