Bad idea if we don’t have 20% down?

[Joani Riley]

20% down vs PMI..

Looking to buy a home with my partner. I have heard not to buy without 20% down because of PMI costs. But I've also heard that more frequently people are buying without 20% down now and PMI costs aren't much. What are the cons to not putting 20% down? (Besides a higher mortgage)

[Ned Carey]

@Joani Riley I see it is your first post so welcome to BP.

If you are buying an investment property you are likely going to have to put down at least 20% just to get a loan.  Often banks want 25% down on investment properties. 

If you are buying a home to live in that is a different story. Just weigh the cost of the PMI vs what you can afford to pay. Make sure if you get a loan with PMI that once you get to 20% equity in the property the PMI can be removed.