Other than PMI insurance

20% down vs. 5% or 10% will probably get you a lower interest rate which will lower your monthly note. 20% down will mean you finance less which will lower your monthly note. So I would say a lower note would be a good thing for most of us.

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20% down vs. 5% or 10% will probably get you a lower interest rate which will lower your monthly note. 20% down will mean you finance less which will lower your monthly note. So I would say a lower note would be a good thing for most of us.

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From what I understand you can get pretty competitive rates with an FHA loan

And I'd always have the option to refinance by putting more in later right?

And in this case I would think that the difference in down payment ($13,200) would do me more good to still have in hand.

I could easily make 100 a month in the market on that

Right now is a rare situation where FHA rates are almost the same as Conventional loan rates which I dont recall happening too often. So why would anyone not go FHA right now that doesnt have perfect credit? FHA does use credit to determine rate (although lender may have a requirement to loan) So if someone has like 700 credit or doesnt put down 20% then I dont see why you would go conventional right now.

when I bought several years ago, I was basically faced with either putting down 20% and having zero excess cash or putting down 10% and still having a decent cushion in the bank account. I went with option #2. Sleeping at night knowing that I can pay for random emergencies >>>>> saving PMI.

Yeah I'd be looking at 35 a month or so

There is no way I could justify letting go of 13K to save 35 a month. That's just stupid. Really really really stupid.

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You can petition the lender to drop PMI after 2 years, I think.

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yep. I did this last year. had to pay like $400 for the appraisal, but it was worth it.

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13,000/35 = 371 months. You wouldn't re-save that 13k by the end of the loan term.

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Not to mention if you could get a 4% return on that money which is pretty modest you'd be looking at tripling that money.

Of course the other argument is that you'd be paying a lower note but the note is already low enough where it's not going to be crippling to my monthly bills. shite it would be cheaper than renting here by a long shot.

powerman let me tell you this from an experienced mortgage person.DO NOT BUY A CONDO!

that is the hardest loan to get right now. if the condo complex is more than 50% non owner occupied then no lender FHA or conventional will do the loan. All condos for FHA must go thru FHA spot approval. And for that loan size i wish you the best finding a broker that would work for 1% of that loan amount on a condo i wouldnt. Second Conventional requires 20% down on condo's right now because PMI companies quite insuring condo last month. now you man find someone to do it conventional but it will be hard. FHA is your best bet but thats still going to be a battle.

makes a difference in rate and also makes for easier underwriting.

that is where 20% helps. An underwriter feels better about a condo when he puts 20% down than 5% down.

and yes, depending on the lender there is a pricing hit for high LTV loans even on FHA.