Without a doubt, a minimum of 20% down will avoid the PMI, and get you a better rate.
Something for you to consider...Say I have 100K. 20% down, or 50K on a 250K home will leave me with
50K in savings....I would stay there...do a 15 year mortgage (which will give me a better rate, too) ..pay an extra $$$ per month on my payment ( this will shave off interest, too) after a year, and with luck/hard work, I added another 10K to my savings...put it on my principal, which will lower my interest payment..and I would continue on that path. If I run into trouble (s/a lose my job)...my savings will be there for me and I have the flexability not to pay extra, but a low minimum mortgage payment until I am stable again.
As always seek the advice of the pros.
I am a realtor with over 20 years of experience and licensed in CT and RI.
You may call me anytime with questions, coments, or maybe a list of foreclosures ( I am conducting an Open House on one this Sunday )...feel free to stop by.
Consider the difference between the monthly payment with 20.0% down and the amount you are considering. That difference is probably neglible i.e. a few hundred dollars per month.
Also, cash is a liquid source of funds that can be used immediately while equity in real estate is money on paper accessable when you either sell the property or place a loan on it i.e. refinance, second mortgage, line of credit
Good luck in your new home search!
Other options to consider are minimum down payment and invest the rest. Ask you accountant or financial planner.
Interest rates on mortgages are running in the low 6% so if you are getting a better return on your investment and can easily handle the monthly payments for this home I would not shift too much over. You can usually make extra payments and reduce the time of your loan and that puts you in control of when and how much you shift over.
You never know what may lie ahead -- unforeseen home improvements, a change in your personal situation . But you the best person to talk to is a mortgage broker who has access to many financing options so you can see which works best for you I know a great one--Leslie Orlando - you can email her at email@example.com You should also talk to your financial advisor about your plans.
Good Luck even though from you email you probably won't need it since it seems you are quite a savvy saver!