Which terms would you take for your 1st property

Question

Would you do a 25% down, 4.5% 30 year loan or

Save the capitol and go 15% down 5.75% 30 year loan on a buy and hold?

Thanks in advance for any thoughts

Jason Inks · Answer

@Bjorik Mutize I will, Thank you for the advice!

Account Closed · Answer

@Jason Inks

Hard to give honest feedback without understanding your goals and seeing the numbers (rent, mortgage, insurance, taxes, % for allowances, etc.).

That said, if the cash flow meets your needs and goals, personally, I would go with the option that leaves more money in your pocket so you can reinvest it.

Account Closed · Answer

@Jason Inks

Hi Jason, project the numbers each way and post. Then you can get much better feedback.

Bjorik Mutize · Answer

To answer your question with what you had, i would put the 25%, 4.5 I, 30 year. This would be even better if this is fixed rate option.

I would shop around for owner occupied options however that may give you even better terms if it is your first property. Search house-hack on these forums and you will find some very creative strategies.

Jason Inks · Answer

@Michael Lewis Lee sorry I didn’t give more details. I am looking in saint louis area. Single family or duplex. 80k to 125k range. So far I’ve gotten approval from 3 lenders but will get a couple more. I was thinking I’d like to put less capitol in as long as I cash flow. Thanks

@David Barnett pmi is looking like 27$-60$ with lenders I’ve spoken too. 2 of them only do 25% down on investment. I’ll have to ask the lender that was ok with 15% if 20% is ok. Thanks

@CJ M. thanks. I’m limited on specifics, was getting approval before searching too seriously. I have my real estate agent sending me single family and duplexes around 80k-125k. I will definitely ask again when I pick 1 to make an offer on.

David Barnett · Answer

I think you'd need to provide some numbers so that we can see what the difference looks like.

Also, it's likely that the 15% down option also includes a few hundred dollars in PMI.  Are you not able to pursue a 20% down option?  That would be my vote if you can find a lender to work with you on a 20% down option.

Michael Lewis Lee · Answer

Hello Jason!  It's hard to say when you don't know the demand or some other particulars. Other than what is mentioned, I would go with the higher payment with less down as long as you have projected that you will get a positive cash flow after the debt payment is made.  Since you do not say where it is also makes it harder to predict what you will save with 10% less down.  Do not fear going into debt as long as it gives you a positive cash flow.  Good luck to you!