5% down or 20% down?

[vacuumsauce]

So something crossed my mind and I'm wondering which option is better for me.
This is going to be our first home and we probably be in it for 5-7 years max . With a price of 180k I only have to put down 9k and 36k if it's 20%. I like the idea of having cash reserves in my account lol.

So what are the benefits of going with 20% down on a first home? Besides not paying pmi even though we won't be in the house for long.

[sports1965]

20% down

Better rates

Lower payment

Higher chance of approval

If you plan on staying 7 years or less I would go with 5% down

[StartingOver10]

There is a Freddie Mac conventional loan too that is 10% down (or 10.1%) and you don't pay PMI.

I know that is not the question you asked, but 5 years with PMI @ $95/month on a 171k mortgage (95% LTV on PP of 180k) is $5700 thrown away to an insurance that only benefits the bank in case you default and never benefits you, the borrower.  This amount is based on an assumption that your mid-score is 720 or above. If your mid score is below that then the monthly cost is substantially higher.

If you get the Freddie Mac conventional loan then there is no PMI and you still have savings in your bank because your down payment is $18k and not $36k. 

Naturally the best thing to do is run the numbers with your LO to come up with something that works for you.

[vacuumsauce]

Thanks guys for your help

[StartingOver10]

Just found out that program with no MI is available with 5% down too, but the trade off is a slightly higher interest rate. Good luck in your search for the right lender

[vacuumsauce]

Thanks!