DownPayment + Cushion

We need to figure out exactly how much we intend on putting down on a house.

What do you think is a reasonable cushion to hang on to after making a DP?

I know it varies greatly but..
Im thinking of holding onto about 2 months of total monthly bills in savings just in case rather than tapping us completely out.

Anyone have any feelings on putting down more or less or have personal experience that would help?

Thanks everyone

Re: DownPayment + Cushion

Personally we had about 2 months..not much more. That includes the mortgage payment.

There wasn't much left. I wish there was more.

Re: DownPayment + Cushion

Personally...and I do mean personally...we try to keep enough money to cover 6 months of expenses with our co-op but as we look to purchase a home we were discussing 3 - 4 months once we make the downpayment. We both have a fear of coming so far just to have something happen and no $ to make our obligations. So hopefully 3-4 months would help us get back on our feet in case of something.

Of course cushions are always easier said than done.

Re: DownPayment + Cushion

My husband is really cautious, so he made sure that we had at least a year's worth of expenses in savings.

Message edited 4/27/2006 11:10:51 AM.

Re: DownPayment + Cushion

After the downpayment and the closing costs we had 6 months of savings left not including retirement stuff. I will say that we had some "surprises" after we purchased our home. We also needed to buy furniture and other house stuff. I would say the first 4 months had much higher than expected expenses, but now that we have lived in our home for 6 months we are evening out and back to what I thought our expenses would be like.

Re: DownPayment + Cushion

Re: DownPayment + Cushion

I think it varies and the type of house you buy could factor into it (needs work vs move in). We had 6 months backup in case one of us was laid off or something and then an extra $10K for unexpected house repairs. Good think we did, we had to replace the boiler soon after we moved in and a few other surprise things.

We also found that our credit card bills were significantly higher for the first 4-6 months after buying the house.

Re: DownPayment + Cushion

Re: DownPayment + Cushion

Don't let a large down payment frown upon your emergency fund.

Remember you can still put down a NICE down payment and have money left over for emergency.

Its called opening a HELOC account.

When you put your large down payment down.... IMMEDIEATELY open up a HELOC line of credit against your equity. Then if the emergency arises... you can pull from that line of credit as needed. With my chase HELOC... i can instantly transfer money from my Chase HELOC into my checking account.


But the key is... to open the HELOC when you are financially stable as they do an income verification and credit check. Don't wait till the emergency happens or else you may not be able to open it.


Once the HELOC is opened... you can have a 500 credit and zero income... and still withdraw from it.

Re: DownPayment + Cushion

Unfortunately, we will only have about 5 thousand left over after everything. The good news is we're getting a lot of hand me downs that we need like a lawn mower, air conditioner, etc. Luckily we don't have too much to do to the house and we bought all our furniture when we got married. It is nerve racking to think that we won't have a lot left over. IMO, if you didn't need to do much work or buy furniture, maybe 10K would be OK. But, that's only my opinion.

Re: DownPayment + Cushion

I think 6 months is a good cushion but I am ultra conservative when it comes to money.