House Downpayment in Vanguard - time to sell?

[mustacheme]

I sold a condo 3 years ago and ended up (unexpedidly) renting since then. I put a portion of the money from the sale into Vanguard index funds, & I contribute a little more each month via automatic investment (my balances are about 80% stock 20% bonds).
My husband and I would like to buy a house in the next 2-3 years, and I am feeling increasingly nervous about having money I want to use in the fairly near term in the stock market. But I also have concerns about selling:
1. Opening the funds required a $3k minimum each. Will Vanguard close my funds if I withdraw to a balance lower than the $3k? I don't want to close the funds & would like to keep putting in a small amount each month.
2. If I sell, would a "high" interest savings account where I currently keep my emergency savings be the best place to put my downpayment savings?

[DavidAnnArbor]

No Vanguard won't close the funds if you have less than $3k in them.

[Turtles All the Way Down]

No Vanguard won't close the funds if you have less than $3k in them.

I agree.  High-interest savings would be safe, and I wouldn't hesitate to pull it out of the market.  Keep in mind you will have to pay taxes on capital gains. 

Cash in a safe would be safer.  CD's or lower-risk mutual funds would be less safe but would bring you some income in the meantime, if you're sure you're not going to start looking in the next 6 months.  My advice:  don't start looking if you're money's tied up, because that's when the perfect house comes along at the perfect price :) 

[cincystache]

Cash in a safe would be safer.  CD's or lower-risk mutual funds would be less safe

uhhhh what? How is cash in a safe safer than a FDIC insured savings account?

[spooky105]

I personally view 2-3 years out as "short term" and hence keep assets associated with that time horizon in cash (high yield, FDIC insured online account).