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I haven't purchased a house, but I would imagine it would depend on what you need to do to the house.
For example: Do you need to do major renovations or repairs? Do you need to buy applicances? What kind of furniture do you need? What do you need for outside? . Those are the sorts of factors that would play into how much you should have set aside. Also, remember that things can come up, so have a good chunk set aside for if something comes up that needs fixing immediately
I will be watching this thread..
We would like to be out of our apartment within two years...and we are not exactly sure what we need to have saved by then...
I think the financial advisors say to expect to pya about 3-5% of the house's value on repairs every year. Also the first year, you will probably want to decorate, need to buy new furniture, adjust to the increase in insurance, taxes, utilities, water, pest control, and other things that you don't need to pay for renting.
I don't have an exact amount that we saved, we are able to bring most small things out of our paychecks so unless something serious happens, we don't have to go into savings.
Also, you will probably need about $5-$7k for closing costs above your downpayment, unless you get the seller to help you out with those.
I said ~$15,000 personally for us. We knew we would need to buy new furniture, paint, and maybe change small things such as flooring/appliances.
If you feel like you won't need any more furniture then you probably won't need to save much more on top of your down payment.
So in the end we have our house down payment + $15K for house + our 6 months worth of savings.
(Sadly we haven't found a house yet and are putting it off until after the wedding but this was our plan.)
We have decided we won't buy until we have a 6 month emergency fund in addition to our down payment. We also want to buy a house that is in need of some TLC, and since mortgages with a budget for repairs barely exist these days, we'll have to have the renovation $$ saved up as well. It's pretty overwhelming!
We've saved enough for a 20% downpayment, all closing costs, and an extra $20k cushion. If the home were to need a significant $$ amount of immediate repairs, we would be looking to adjust the purchase price and/or our portion of the closing costs accordingly so that we would not need to dip into that cushion fund. It's important to us to make sure that we have fallback money because you just never know what is around the next corner.
You should definitely have at least $10K in cash (not investments) AFTER closing costs at a bare minimum. You might think that's a lot of money, but it could be gone immediately with one major problem. And you're going to want to buy things like furniture, textiles, etc. to fill the home and if you're cash poor you won't be able to do that for a while.
There are all kinds of unforseen expenses when you buy a home. Everyone gets a cut, then you have to move which is expensive. Teh first few weeks you'll be living at Home Depot and BB&B which can really hurt your wallet!
I recommend having 15-20k saved up if the house has any issues, maybe 10-15k if it is fairly new. In the first 2 years we've been at our place... our AC broke (it was only 3 years old, but because we weren't the original owners, it wasn't fully covered), bay window rotted TWICE, copper sheeting on our overhang flew off in a wind storm.. those were the big ones we had to pay someone to come in and deal with. That doesn't include the washer crapping out (again, only a few years old - clog in the pump), painting the entire place, furniture, and renovations in the basement we wanted to do.
Don't forget about your own health, your car, or anything else you may have to put money into. We did an FHA loan so we could have even more left over, just in case we had any issues. I'm glad we did that, as it has given us time to save up even more money for our next house (we'd like to move in another 2-5 years) so we can do 20%, plus our one dog has needed 2 surgeries in the past year.
Also - if you plan to make purchases from Home Depot or Lowes, make sure you pickup the movers packet from the post office. I believe it's a 10% coupon. I got several of them and used them over time. The coupon was for Lowes, but HD honors it as well. Definitely helps out. Our realtor also belonged to a wholesale flooring company, which her clients could go to and use her name to get in for free.
There isnt really a good answer anyone can give you for this. Will you need to buy new furniture right away or do you plan on accumulating stuff over time? Are you buying a older home or new construction? Upon moving in, we got new gutters to the tune of almost 5k. With in the first year, we bought probably about 4k of furniture, area rugs, and window treatments. And trust me, that 4k didnt go far at all, we have one completely furnished room right now and still havent bought a dining table almost 2 years later. We plan on buying a wood pellet stove to help save on heating cost, that's going to be about 3k. Oops, forgot about the lawn mower and snow blower and various yard tools, another 3-4k there. So I'd say about 20k in saving should be comfortable. Even as little as 10k so you can take care of anything essential off the bat and just save up again for anything that is not really that important.
I've read in several places that you should have 3-6 months worth of monthly expenses saved up.
I will just say what we spent in the first year of homeownership, here are some details: 2100 sq ft home, 50 years old, solid major appliances (furnace, A/C, hot water), no major home repairs required.
Here is what we spent in the first year:
-$5-6K furniture
-$1000 paint/paint supplies
-$1600 new kitchen counters
-$1000 new gas cook top
-$100 cleaning supplies (for move in weekend)
-$200 lawn mower
-$300 misc garden, snow, yard, house tools, bug spray/repellent
-$300 misc interior design (door handles, rugs, lighting, cabinet nobs)
Total = $10,500
Like I said, we bought furniture (whole family room, plus a TV, desk, book case, treadmill, china cab, kitchen cab, patio furniture) and had some things that NEEDED to be done in the kitchen. But in terms of actual home repairs we have been lucky and aside from replacing 1 gas hose thats all.
I've heard $10-$20k in a "home fund" for any unexpected costs...like if you decide to do some renovations and realize the entire home has outlawed electric, etc.
Ive heard you should have an 8 month emergency fund.
I also STRONGLY urge anyone to have an inspection done by prior to closing and make sure your offer stipulates this; this is a very good way to have an idea of what you are getting into. You can also try to negotiate some repais with the seller (the bank who owned my current house put on a new roof and gave me a home warrenty due to what the inspection found). When I was looking for a house, I found one I loved but after the inspection found out it was a money pit. My real estate agent, a very mild mannered man, said it was the worst house/ inspection he had seen in his 17 years in that business. I was devestated but the $350 was well worth it. I also made sure to pick someone who had been doing inspection for 20 years, was a handy man and licensed electrician, and actually wanted me to be with him during the inspection. I called about 12 people before choosing.
When we bought our home, we had a good amount in savings betweeh the both of us . We live in an area where the homes are expensive and we knew what we were getting into. But we were clueless about the home-purchasing process.
What we didn't expect--the amount needed for the purchase and sale, closing costs, inspection, etc. These can be significant especially if funds are limited. All of our "funds" were basically gone after that process. So I would say trying to save as much as possible is a great start. For our area, easily saving anything from 15K-20K+ would be a min.
We are the type of people that didn't have to have everything perfect when we moved in. We have lived in our home for almost 2 years and are finally painting the walls. We do what we can afford.
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How much should one save in addition to the down payment when planning on buying a single family house-- specifically in the Mid-Atlantic region of the US (if that matters)? I know the more the merrier. But I wondered what other bees have done or heard should be done. Can't get a good answer from the books I'm reading.