A client is deciding between a 20% down payment (avoiding PMI) and a 10% down payment (keeping cash for investments). What framework should a CMPS use to guide this decision?
-
A
Always recommend 20% down to eliminate PMI costs
-
B
Compare the after-tax cost of PMI against the expected return on retained invested capital
-
C
Recommend 10% down to preserve liquidity at all times
-
D
Advise the client to split the difference at 15% down