Smaller Downpayment or Lower Interest Rate
Hey All, I'm trying to get some feedback on a financing question. I will be seeking financing for a $150k loan as an investor with a standard lending institution. I can either do a 20% down payment and obtain a 4.625% interest rate or a 25% down payment and get a 4.125% rate. On the 25% deal, my cash on cash return will be 21.24% ..... on the 20% deal my cash on cash return will be 23.62%.
My thinking is that the lower down payment would leave me $7600 cash to invest, while returning my cash on cash faster. Yes I get a slightly higher cash flow with the lower interest rate and a cheaper overall deal but ....
What would be your deciding factors when making this choice.