First time homeowners - Help us decide a loan!
First-time homebuyers here trying to decide between two mortgage options on a $565k house and would love opinions.
Option 1:
- 20% down ($113k)
- Interest rate: 6.75%
- Cash to close: ~$121.5k ($113k down + ~$8.5k closing costs)
- Loan amount: $452k
- Monthly P&I: $2,931
- No PMI
Option 2:
- $100k down (17.7%)
- Interest rate: 6.375% (bought down with points)
- Buy down cost: $4,650
- Cash to close: **$120.5k**
- Loan amount: $465k
- Monthly P&I: $2,935
- PMI: ~$36/month until we hit 20% equity
Monthly payment is basically identical, but option 2 gives us the lower rate while putting less down. Downside is PMI + larger loan balance.
I will say it’s a little bit complicated because I am starting a new job 5 days after we close (quite actually the worst timing, I know) And our realtor recommended trying to close before I start my job. So it’s 22 days to close.
As first-time buyers we keep going back and forth. Which would you choose and why?