I have those two options for my first home. I want to start real estate investment ASAP, at the same time, don’t want to give too much money to the bank. If you were me, what would you do?
@Hyun Don Yun , if you have limited (or no) capital, then the 1st option is the one. Otherwise, do the math and figure out how long it takes to "save back" the 20% DP.
What is the context for these rates? They are quite a bit lower than I'm seeing for any kind of investment loan and most lenders insist on 25% down on an investment property.
I am buying a new home for myself, and the one with 0% down is doctors loan. I am thinking to rent out this house in3-5 years and move to bigger house.
@Hyun Don Yun if all the other numbers work for you to do no money down then, in my opinion, do no money down ALWAYS!
Example of why, in my opinion, it’s better for no money down.
You buy a home for $200,000.00
You put 20% down, $40,000.00 of your money
Now the market just turned down 20%
Now you just lost $40,000.00 of your money you put down until the market turns back up 20%
Now.......you put nothing down and have $40,000.00 in the bank and the market turned 20%. YOU STILL HAVE $40,000.00 in your bank account to invest in another home at a low market point. The bank lost that money buy not having you put any money down and since your thinking about moving to rent out your house in a couple years, who cares about that small interest rate difference. Your gonna move and your tenants will be paying that soon, not you.
Of course you need to run all numbers on this but NO MONEY DOWN IS THE WAY TO GO!!