home ownership

Operation “Buy Our First Place” Has Commenced!

I’m pleased to announce that Lloyd and I have set a date!  …a date for when we plan to buy our first place!

Before you get too excited, we’ve still got a ways to go, but the point is that we have a plan and a set date (or month) that we will start looking!  I’m a little obsessed with planning ahead for events (be it a run or buying a house), so I’m ecstatic that we have a plan in place right now.

As you all know, Lloyd and I are 100% debt-free and have been for quite awhile now.  When we became debt-free, we starting socking money away for our first house like crazy.  But, we’re not just saving for our first house, we’re also saving for our New Home Expense Fund (NHEF).

House Down Payment

We are planning to buy a house in the $250,000 range.  Our true range that we’re looking in is between $200,000 – $300,000.

However, I really don’t want to spend more than $250,000.  Where we live, $250,000 can buy you enough house to raise a family of 4 or 5 (which we plan to have … someday).  Sure, we could probably get approved for a house much more expensive, but we don’t need that much house.

I am adamant about not buying a house until we have 20% or more of a down payment.  With the timeline that we have set up, we should exceed that goal by the time we start looking.

New Home Expense Fund

I can’t stress enough just how important a new home expense fund is – home ownership comes with more expenses than just a monthly rent payment.

For example, a good friend of mine recently bought their first house and was telling me the other day how the air conditioner had just gone out that weekend and cost a cool $5,000 to replace.

Where are you gonna get that money if you don’t have a NHEF?  There’s no way I’m financing that $5,000 and getting myself back in debt.  It just won’t happen.  I broke up with debt a long time ago and I don’t see us rekindling our romance ever again.  That ship has sailed.

So, in addition to saving for our down payment, we’re also opening a new online savings account for all the expenses that come with home ownership.  But we’re not just saving to maintain our house, the NHEF will also cover other expenses.  The NHEF will not only cover maintenance costs, but it will also cover furnishings, decor, and other home equipment (like lawn mowers, tools and all that jazz).  We currently have enough furniture to furnish a two-bedroom apartment – not a four bedroom HOUSE – so we’ll need to spend some dough furnishing our new place.

And because home maintenance never ends (one of the perks of renting, people!), neither should the NHEF end.  Which means that eventually I’ll just refer to my NHEF as my HEF.  Cute, huh?

We Set The Date!

Now that you know what exactly we’ll be saving for, you’re probably wondering when exactly we’re going to start looking for houses, huh?  I can officially tell you that we are going to start seriously looking for a house in December 2011.

Why December 2011?

The date mostly revolves around when our lease is up and our savings accounts.  Our current lease will end in April 2011, which is just a mere two months before our wedding.  We probably wouldn’t be 100% comfortable with moving before our current lease ends, so we’re just going to sign another one-year lease next April which will then end in April 2012.  While we’ll probably be more than financially ready to move during the summer of 2011, but we don’t want to break our lease or rush into anything.

So, since we want to move out before our lease ends in April 2012, we’d like to start looking in December 2011.  That way, we’ll have plenty of time to look for our dream house without being in too much of a rush.  Additionally, it’ll give us that many more months to pad our savings account.  If we do happen to find a house before our lease is up, we are okay with paying the rent for a couple months after we’ve moved out.  Trust me, it’s much better than paying a cancellation fee!  Those things are ridiculous!

So, there you have it:  We plan to officially start house-hunting in December 2011.  Until then, we’ll be quietly padding our down payment and NHEF accounts in preparation for the big move.

If you are a homeowner, what has been your experience with buying a house?  Did you feel like you bought too early or at just the right time?  If you’re a renter, why are you waiting to buy a house?  Are you saving for both a down payment and a New Home Expense Fund?


  • I love your idea of a New House Expense Fund. We’re renters because we’re both still in school and don’t think it’s the right time to buy. Who knows where Mr. Red will get a job after he graduates? We’re not even sure Knoxville is the town we want to retire in. So we’re going to wait until we’re 100% sure of where we want to live long-term and have a whole bunch of cash saved up. (I’d like to have savings for home expenses AND save up at least 50% of the home cost. I hate debt!)

    • Wow, 50% – that’s awesome! I’d love to save that much, too, but I doubt that will happen by the time we want to move. I totally agree – I hate debt, too. As soon as we get that mortgage, I’m sure I’ll be antsy to pay it off! And I totally agree about waiting until you know where you want to be. Lloyd and I know where we want to live until our kids have moved out, so that’s another reason we’re ready to buy. 🙂

  • Great idea on the new house expense fund. I think a lot of people think that when buying a house, all they have to save for are the down payment and closing costs. Unless they are buying a brand new home that may be covered by the builder’s warranty, establishing a new house expense fund would come in handy.

  • I don’t know if I’d just have a really hefty EF, or a separate house expense fund. I’m a big fan of individual pots, so maybe I’d keep them separate.

    Why are we renting? Still want to travel. T only just started work again. And a $60-80k down payment takes time to save… 🙂

  • I’m 23 I purchased my own home in conjunction with my boyfriend. Marriage has been talked about and we’ve been together for years. We both have stable careers and we are in our hometown which we love. We bought in March and closed on April fools day when intrest rates were low! We have a good savings account and are both debt free with the exception of our 30 year mortgage. We manage to save 15 % for our down payment plus closing costs and a reno fund and new car fund.

    Thanks for all the advice in this blog! I’ve been reading since you have been on the cheap! Good luck with your wedding planning!!

    Thanks so much,


    • Wow, you guys sound like you’re in a great financial position! How funny that you closed on April fool’s. 🙂

      Thanks for following me through both blogs! 🙂

      • We didnt even realize it untill someone made a joke about our closing date! I love the new blog and the layout! Keep it going!

  • We bought this year and moved at the end of may. Right before our wedding. We bought new so hopefully that will alleviate some of the hassle of repairs etc at least for a while. I WISH we could get a lot of house for 250 where we live. This market is one of the most expensive. We got a really great interest rate and we did not put anything down. We are debt free though and I push savings big time so we will just continue to save for things that come up. It can be a very stressful experience! But I am so happy to be in our home.

  • I love the idea of a New House Fund, but I feel like when I get to the point of buying a home, I’d want to put all that money into the down payment . Depending on where I decide to buy a place (ahem LA / SF / Boston?!), it might take all I have just to scrape together a 15 or 20% down payment.

  • I love the idea of a new home expense fund. That’s a great idea!

    Your post actually sent me looking at housing ads. We are not buying for another five years for sure, but the area we want to live in costs about $100K for the size house we will need so I’m pretty sure that will work out well for us. I just have to knock out my current debt then start saving!

  • You might be able to get a month-to-month lease in April 2011, so that you have more flexibility in your closing date. They’re pretty common around here, but you have to specifically ask.

  • Hubbin and I are going to start our home search beginning January. I need to show my second year of self-employment, but the minute I have my schedule C prepared, we’re getting pre-approved. In our area, we can get a larger more efficient home than our apartment for less per month (including taxes and interest.) We’ve always been moderate income, so we qualify for several down payment assistance programs in our county that our designed to stabilize neighborhoods. (Apparently we’re good influences.) We’re hoping for a small home, thousand sf or less, on 5-8000 sf lot. We’re looking at around 115-130k for a property. Not bad!

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