Rental Property Investor · Hoboken, NJ · Member since 2010 · 40 posts · 6 votes
Hello all,
I've run numbers on what I think are fairly conservative possibilities regarding a property and the question comes down to this.
My CCR is almost 1.5% higher even after taking into account monthly PMI costs if I go with an 85% LTV vs an 80% conforming one.
The obvious tradeoff is lower nominal cashflows esp because of a higher P&I cost, and lower equity, with more 'dead' cashflow going to PMI. But should I care given the above information?
The swing is $50 less per month to have to put 5% less down; which in this market would be 25% of another down payment (due to fees for processing etc)!
COC is all well and good, but it means nothing if that other 5% isn't put to work, and is just sitting there. I'd put the 20% down. I assume you're talking conventional, not FHA.