My wife and I are looking to purchase a home in the near future. With this in mind I am curious about how we should now look at our emergency fund situation. The general guideline you will see is for 6 to 12 months in liquid assets to cover living expenses.
We intend to keep our first home for rental purposes. We just found out from lenders that we have talked to, that we must meet the following criteria for a mortgage:
- We MUST put 20% down
- We MUST have 6 months of payments for our current residence AND the new residence (including taxes, insurance, and mortgage)
With that in mind we will have to replenish our emergency fund -- luckily due to the loan requirements we will be covered as far as housing costs go. What new expenses should we take into account since we will have a rental property? Do we simply follow the same guideline, and dip into the fund if a repair is needed or do we need to add in things like the refrigerator or dishwasher dying?