House downpayment: How low would you let savings go?

[Anonymous]

OP, I bought a new house recently and it drove me batty seeing all of that money leave my savings account. in a way, though, you aren't spending -- more like moving the money. thats what I tell myself!

[Anonymous]

This is actually making me feel much better! I feel like DCUM posters tend to be super conservative.

I took from OP not that s/he is underwater, but that they'd be selling at less than what they paid. We did this last year for similar reasons.

We didn't touch our retirement accounts, kept paying off some student loans aggressively like we had been, and went down to about $25k in emergency savings. It's worked out fine, due to some conservative budgeting and a salary bump. DH who is very conservative with money was really stressed for a while but now can acknowledge that it's been worth it.

[Anonymous]

I'm keeping a 6 month emergency fund (so 30k for bare bone expenses). I was really tempted to drop it down to 10 k so I could put extra towards my house, but the worry wart in me won out.

[Anonymous]

Anonymous wrote:This is actually making me feel much better! I feel like DCUM posters tend to be super conservative.

I took from OP not that s/he is underwater, but that they'd be selling at less than what they paid. We did this last year for similar reasons.

We didn't touch our retirement accounts, kept paying off some student loans aggressively like we had been, and went down to about $25k in emergency savings. It's worked out fine, due to some conservative budgeting and a salary bump. DH who is very conservative with money was really stressed for a while but now can acknowledge that it's been worth it.

OP here: You are right. We are not underwater on our current house. I also thought DCUM posters would tell me that was way too risky. You're all making me feel better.

[Anonymous]

Not sure 25k is enough in an emergency. But if schools are not good where you live now, I would do it. We spent about 40% of our savings on first house DP.

[Anonymous]

I am surprised by these answers despite finding DCUM way too conservative. We felt comfortable putting just about a half of our savings down, leaving us with over 100k in savings.

[Anonymous]

We went down to $5k. We've now fully replenished our savings. You will be fine. Go for it.

[Anonymous]

We went down to 27k and then had a ton of unforeseen work and now down to 17k. This has made me feel so much better bc I was just talking my husband down off of a homeowner related money panic attack not an hour ago. Thank you for this thread!

[Anonymous]

My mother, the realtor suggests that for a house that is less than 10 years old, plan for up to 1% of the house value in first year or so of maintenance. For a house more than 10 years old, plan for up to 3% of the house value in the first year or so of maintenance. This can be liquid or if you calculate your mortgage and salaries, you can include the money that you will save from your salary after paying for basic expenses. So if you buy a house worth $500K, older than 10 years, plan for about $15K in expenses. That could be $8K in cash and $7K that you expect to save in the first 12 months.

Now, being in my third house, I think it's a pretty good evaluation of what to expect. Not necessarily what will happen, but what could happen.

[Anonymous]

Anonymous wrote:My mother, the realtor suggests that for a house that is less than 10 years old, plan for up to 1% of the house value in first year or so of maintenance. For a house more than 10 years old, plan for up to 3% of the house value in the first year or so of maintenance. This can be liquid or if you calculate your mortgage and salaries, you can include the money that you will save from your salary after paying for basic expenses. So if you buy a house worth $500K, older than 10 years, plan for about $15K in expenses. That could be $8K in cash and $7K that you expect to save in the first 12 months.

Now, being in my third house, I think it's a pretty good evaluation of what to expect. Not necessarily what will happen, but what could happen.

Great advice. I've never heard that recommendation but as a 5th time homeowner, I totally agree.

[Anonymous]

I think it sounds fine OP.