Get a loan with PMI or save the money?

Question

Hello BPers

I am about to close on the deal.

Purchase price is $144000

Either I do 15% down and pay PMI, save the cash or 20% down and no PMI

Down payment difference is $7000 more for 5%

PMI will be around $67.

Mortgage with PMI = 910

Mortgage without PMI = 785

Rent potential is $1200-1300

What should I do?

Thank you.

Gagan Johal · Answer

@Sebastian Gast Yup I went ahead and got the loan with NO PMI. I know I made the right decision. PMIs will suck the money right out of your profits. Thanks for the comment.

Gagan Johal · Answer

@Elizabeth  Colegrove I agree with you.I saved my pennies and it was time i get started. Got my first deal done and now on to the next one.I appreciate the feedback.

Elizabeth Colegrove · Answer

@Gagan Johal

Than do what you are comfortable! This world is hard and crazy enough that you got to start off comfortable :)

Gagan Johal · Answer

Thanks guys! I'm leaning more towards playing 20% down.

@Elizabeth  Colegrove  I am pretty comfortable with doing 20%.

@Flavio Zanetti House does not need any repairs..it is fully rehabbed.

@Kirk R.  That's what I'm leaning towards.

Kirk R. · Answer

Could you do 20% to avoid PMI.  Then get another loan on it shortly after?

Flavio Zanetti · Answer

Also depends if you are going to have to do any remodeling or fixing the property. Cash is always king when it comes to immediate needsGood luck with your deal @Gagan Johal

Flavio

Elizabeth Colegrove · Answer

If it was me I would do 5%, save the rest of the money to now have 15% of the 20% required to buy a pure rental :) But I am crazy and love leverage!

Honestly it really depends on your comfort with leverage and long term goal :)