Put 3.5% down FHA in a hot market or wait 2 yrs to put down 20%?

[Maxwell Hibbard]

Hey I live a hot market of West Philadelphia — not sure if I should wait 2-3 years before putting down 20% for a conventional fixed, or if I buy now I could only put down 3.5% FHA with PMI. Thanks all!

[Russell Brazil]

and to tack on to what @Chris Mason said....we are generally in a rising interest rate environment. So it is entirely possible a loan in 2 years with no PMI gives you the same effective rate or higher as a loan today with PMI, plus you miss out on the 2 years of debt reduction and appreciation.

You can always save up that additional money too over the two years while owning, then do a lump sum down on the mortgage and do a recast to bring your payment down. (with FHA you are still stuck with the PMI, but if its not a multifamily....just do a 3% down Homeready loan instead) Or Chris...that Freddie Multi product you mentioned before.