Really struggling to understand best way to go...

[lovesMountains]

Your wife wins in my book! However, I do suggest at least 10% down.

Get a 30 conventional loan with one of these great low rates, begin paying extra on it to treat it like it's a 15 year mortgage and you'll be able to discontinue that PMI in just a few years.

Now is the time to find your forever home BEFORE your child reaches middle school age.

Good luck!

[vinivedivichi]

When interest rates go up house prices will come down. It shouldn't take you long to save for a down payment and I doubt interest rates change much in the shirt term.

[jtb1987]

Thanks everyone for the replies,

It looks like the majority recommend only putting 5% down, paying extra each month towards the principal. The reason being that we can then use the extra cash to act as if we have a 15 year loan but still have the flexibility to use the cash elsewhere in case of emergencies. That makes sense to me - we would just need the discipline.

What are the biggest cons to choosing not to have a large down payment/equity? What are the risks directly associated to this choice?