3 finance options - Struggling to decide
My wife and I are under contract to buy a home. We plan to do a live in renovation with the intent of making it a rental (selling only as a plan B). The future plan includes buying another home, possibly fixing it up, staying for a bit, and then making it a rental. The process repeats.
I am a buy and hold guy. I don't have any interest in becoming a flipper but if I see a chance to get a big payday I will take it. I am not seeking advice trying to pull me away from buy and hold as a primary strategy.
We have been presented with three financing possibilities and I am struggling to decide.
FHA 3.5% down 3.49% interest - Required mortgage insurance is $128.74
Conventional 5% down 4.25% interest - Required mortgage insurance is $96.27
Conventional 20% down 4.25% interest - No required mortgage insurance.
We have plenty of cash for any down payment and for the renovations.
I am struggling with:
- The idea of paying mortgage insurance.
- Having a big chunk of our money (roughly $27,000 additional dollars toward the down payment) tied up in the home.
- Having this home financed FHA (and not being able to get a second FHA loan).
- Going with FHA knowing the only way I will get rid of the PMI is to refinance (likely at a higher interest rate).
I welcome your input.