Take higher cash on cash return by using an 85% LTV (w/ PMI) vs 80% LTV?

[Matthew Mueller]

Hello all,

I've run numbers on what I think are fairly conservative possibilities regarding a property and the question comes down to this.

My CCR is almost 1.5% higher even after taking into account monthly PMI costs if I go with an 85% LTV vs an 80% conforming one.

The obvious tradeoff is lower nominal cashflows esp because of a higher P&I cost, and lower equity, with more 'dead' cashflow going to PMI. But should I care given the above information?

The swing is $50 less per month to have to put 5% less down; which in this market would be 25% of another down payment (due to fees for processing etc)!