How to Own Your Dream Home

For most people, their first home isn’t their dream home. It starts off nice enough. But as time goes by and your family grows, starter homes tend to get a little . . . cramped.

But don’t hate on your current home too much. Because while it gave you a safe and dry place to lay your head at night, it was also setting you up to own your dream home someday.

We’ll show you how it all works and walk you through the steps that’ll get you in your dream home—one you can actually afford!

How to Get Your Dream Home in 5 Steps

Here are the steps:

  1. Follow the Financial Basics
  2. Find Out How Much Equity You Have
  3. Set Your New Home-Buying Budget
  4. Find the Right Dream Home for You
  5. Be Picky and Patient

Now let’s cover each step in more detail.

Step 1: Follow the Financial Basics

First thing’s first—you have to get out of debt, get on a budget, and build up an emergency fund of 3–6 months of expenses. Sounds pretty basic, right? If you haven’t completed these steps, then you’re not ready to upgrade to your dream home . . . yet.

Now, when you’ve got house fever, it can be hard to focus on paying off debt or saving an emergency fund before you upgrade your home—especially when you’re feeling the pressure of rising home prices and interest rates.

But whether it’s your second or third house, you should only buy a home when you’ve covered the financial basics we mentioned above. Then you’ll be ready to start the journey toward owning your dream house.

And that journey starts with your home equity. What’s equity? Well, we’re glad you asked . . . that brings us to the next step.

Step 2: Find Out How Much Equity You Have

Home equity is a pretty simple concept: It’s your current home’s value minus whatever you still owe on your mortgage.

See, in most cases, your home’s value increases over time. Similar to other long-term investments (like retirement accounts), homes gradually increase in value. There have been periods of ups and downs in the market to be sure, but the value of real estate has consistently gone up. According to the St. Louis Federal Reserve, the average sale price of a home has increased over 2,300% from 1965 to 2023! And in the last ten years (2013 to 2023), there’s been a 68% increase.1 As your home increases in value, so does your equity. In real estate terms, this is called appreciation.

Other factors that increase your home’s equity include:

  • Added value: Home improvement projects like adding square footage, updating fixtures and appliances, or even just slapping on a new coat of paint can add value to your home.
  • Mortgage paydown: Paying down your mortgage not only gets you out of debt faster, it also builds your equity. The less you owe on your home, the more equity you have.

The amount of equity you have gives you a pretty good idea of how much money you’ll end up with after selling your house. You can use that money to make a hefty down payment and cover the other costs that come with buying a home.

Find expert agents to help you buy your home.

So, how do you determine your home’s value? Well, you can get a ballpark estimate on real estate websites like Zillow, ask a trusted real estate agent to perform a competitive market analysis (which they’ll do anyway if they’re helping you sell your house), or get a professional appraisal.

Finding out your home’s equity will involve a little math, but it’s third-grade-level stuff, so don’t sweat it.

Here’s what we mean. Let’s say your home’s current value is $355,000. When you sell that house, you’ll have to pay for between 1–3% of the sale price in closing costs, another 6% in fees for the real estate agent who helped you sell it, and whatever’s left to pay off on your mortgage.

That means you can estimate clearing over $223,000 from selling your house. That’s a killer down payment on your dream home! And if your home is paid off, that’s even more money to put down and use to pay for things like repairs and moving expenses.

Step 3: Set Your Dream Home Budget

Once you know how much you’ll clear from the sale of your home, you can start making a budget for your dream home. 

The key to owning your dream home (instead of it owning you) is to keep your mortgage payment to no more than 25% of your take-home pay on a 15-year fixed-rate mortgage, along with paying a down payment of at least 20% to avoid private mortgage insurance (PMI). Never get a 30-year mortgage even if the bank offers it (and they will). You’d pay a fortune in interest—money that should go toward building your wealth, not the bank’s.

So, let’s say your take-home pay is $4,800 a month. That means your monthly mortgage payment shouldn’t be any bigger than $1,200. By the way, that 25% figure should also include other home fees collected every month with the mortgage payment like homeowners association (HOA) fees, insurance premiums and property taxes.

Plug your numbers into our mortgage calculator to see how much house you can afford.

And don’t forget to budget for all those other costs that come with the home-buying process in addition to your closing fees—things like moving expenses and any upgrades or repairs you might need to make. You don’t want these hidden costs to catch you off guard or drain your emergency fund.

Step 4: Find the Right Dream Home for You

This is where things get real. After all your hard work building up your equity (and doing a lot of math—don’t forget that), you’re finally ready to start the house hunt. Woo-hoo!

But don’t lose focus. Stay zoned in by making a list of features that make a home fit your budget, lifestyle and dreams—and stick to it throughout your house hunt. Here are a few ideas to get you started.

  • Don’t compromise on location and layout. If you plan to be in this home for the long haul, an out-of-the-way neighborhood or a wacky floor plan is a deal breaker. Look for a community and layout that’ll suit your lifestyle now and for years to come.
  • Think about how much space your family needs. While your budget has the final say about how much home you buy, you’ll want your dream home to fit your family’s needs through different life seasons.
  • Consider the school districts. If you have or want kids, the quality of the nearby school districts is probably already on your mind. But even if you don’t have kids or you’re retired, keep in mind that having good schools nearby could increase your home’s value.
  • Look for a house that’ll grow in value. Are home values rising in the area? Is the number of businesses going up? These factors can help you figure out whether your dream home will turn into a good investment.
  • Count the costs. Want that fancy master bathroom with the multiple showerheads and the Jacuzzi tub? Be clear on what’s a must-have and what’s nice to have. And don’t forget, upgraded features like that will make your dream home more expensive.

Step 5: Be Picky and Patient

We know you’re anxious to get into those new digs, but be patient. Wait for the right house at the right time. Don’t spend your money on a less-than-ideal home just because you’re tired of looking.

The key is finding a good real estate agent who understands your budget and refuses to settle for “good enough.” They’re as committed to your dream as you are and will have your back throughout the entire process, no matter what it takes.

In addition to teaming up with a great real estate agent, you can take a couple of extra steps to make sure you’re ready to strike as soon as the right home comes up:

  • Get preapproved for a 15-year fixed-rate mortgage. Having preapproved financing is a green flag for sellers—especially in multiple offer situations. And because this puts most of your information in the lender’s system, you’ll be on the fast track to closing once your offer is accepted. 
  • Offer earnest money with your bid. Earnest money is a deposit to show you’re truly interested in a home. Usually it’s 1–2% of the home’s purchase price and it’s applied to your down payment or closing costs. Even if the deal falls through, you can almost always get most of it back.

Find a Real Estate Expert in Your Local Market

Now, you might be thinking you have some work to do before you’re ready to find your dream home. Or you may be realizing your years of hard work are about to pay off! Regardless, if you follow these steps, you’ll find the house you’ve always wanted and avoid a purchase you’ll regret.

Once you’re ready, connect with one of our RamseyTrusted real estate agents. These are high-performing agents who do business the Ramsey way and share your values so you can rest easy knowing the search for your dream home is in the right hands.

Find the only real estate agents in your area we trust, and start the hunt for your dream home!

Entitled Neighbor Vandalized My Sick Grandpa’s Car – I Taught Her to Mind Her Own Business

When I saw the cruel message scrawled on my recovering grandpa’s dusty car, I was livid. But uncovering the culprit’s identity was just the beginning. What I did next would teach this entitled neighbor a lesson she’d never forget.

Two months ago, I was at work when my phone rang. It was Mom.

“Meg, it’s Grandpa,” she barely managed to speak. “He’s in the hospital. He—”

“What? Hospital?” I cut her off, totally blindsided. “What happened?”

A woman talking on the phone at work | Source: Pexels

A woman talking on the phone at work | Source: Pexels

“He had a heart attack,” Mom continued in her shaky voice. “We gotta go see him.”

“Oh my God, Mom, is he okay?”

“I don’t know, Meg…”

“I’ll be there as fast as I can, Mom,” I replied as I quickly logged out of my work email.

The thing is, Grandpa Alvin is my rock, my confidant, and my favorite person in the world. It won’t be wrong to say that I love him more than Mom. Shh! It’s a secret!

An older man standing in his house | Source: Midjourney

An older man standing in his house | Source: Midjourney

And that phone call from Mom had turned my world upside down. I could literally feel a knot in my stomach as I rushed out of my office after informing my boss about Grandpa’s condition.

The drive home from my workplace is a blur. I don’t remember how I got there, but I quickly picked Mom up before we rushed to the hospital.

A woman driving a car | Source: Pexels

The drive from our house to the hospital was about 45 minutes long. And let me tell you, those were the longest, most painful 45 minutes of my life. Mom kept crying the entire time, while I could feel my heart pounding inside my chest.

Once we reached there, a nurse told us that Grandpa was in the operating room. After what felt like an eternity, the doctor came out.

A close-up shot of a doctor's arms crossed on his chest | Source: Pexels

A close-up shot of a doctor’s arms crossed on his chest | Source: Pexels

“The surgery was successful, but he needs rest and care,” he told us. “He needs to eat a heart-healthy diet, low in salt and saturated fats. Regular, gentle exercise is crucial. And absolutely no stress.”

“Alright, doc,” I nodded. “But when can we see him?”

“Is he really okay?” Mom asked impatiently.

“Don’t worry,” the doctor reassured her. “He’s resting comfortably now. The nurses will let you know when it’s a good time to visit.”

A doctor talking to a woman | Source: Midjourney

A doctor talking to a woman | Source: Midjourney

Grandpa was allowed to go home a few days later, but there was a problem. He lives in another town, and we couldn’t visit him every day to look after him.

As a result, we hired a full-time nurse.

She was a godsend, agreeing to cook for him too. For two months, Grandpa didn’t leave his apartment and focused solely on his recovery.

Last week, I realized it had been too long since I’d seen him.

A woman sitting on a chair, thinking | Source: Midjourney

A woman sitting on a chair, thinking | Source: Midjourney

“Mom,” I said over breakfast, “I’m going to visit Grandpa this weekend. Wanna come?”

Her eyes lit up.

“That’s a wonderful idea, honey,” she smiled. “I’ll come with you. He’ll be so happy to see us!”

“Perfect!” I said before I took a bite of my scrambled eggs.

On Saturday, I woke up early, bought a bouquet of Grandpa’s favorite bright yellow sunflowers, and drove all the way to his place with Mom.

A bouquet of sunflowers on a car | Source: Pexels

I couldn’t wait to meet him and see his face light up. I was expecting a day full of Grandpa’s stories, unaware of what was waiting for us there.

As we pulled into the parking lot of his apartment complex, I spotted his old, beat-up car. It was covered with a thick layer of dust, clearly proving he hadn’t driven it since getting sick.

But as we got closer, something made my blood boil.

A woman in a car | Source: Midjourney

A woman in a car | Source: Midjourney

Someone had left a message on the rear windscreen. It seemed like they had written it using their finger. It looked fresh.

The message read, “YOU ARE A DIRTY PIG! CLEAN UP YOUR CAR OR GET OUT OF THE COMMUNITY. SHAME! SHAME! SHAME!”

I was absolutely furious. How could someone be so cruel to an old man who’s been too sick to even get out of bed, let alone clean his car?

A woman in a car, looking angry | Source: Midjourney

A woman in a car, looking angry | Source: Midjourney

“Oh my God,” Mom gasped. “Who would do such a thing?”

I clenched my fists. I could feel my cheeks burn with rage.

“Some entitled jerk with nothing better to do than harass a sick old man, that’s who.”

Then, I felt Mom’s soft hand on my arm.

“Honey, calm down,” she said. “Let’s not upset your grandfather.”

I took a deep breath, trying to compose myself.

“You’re right. Let’s go see him.”

A parking lot of an apartment complex | Source: Pexels

A parking lot of an apartment complex | Source: Pexels

We quickly headed up to Grandpa’s apartment. I rang the bell, waiting for him to open the door.

“My girls!” he smiled from ear to ear. “What a wonderful surprise!”

“Grandpa!” I hugged him tight. “You look so good! So handsome!”

“Well, of course I do!” he chuckled. “When have I ever not looked handsome? Even in my hospital gown, I was turning heads left and right!”

An older man in his house, smiling | Source: Midjourney

An older man in his house, smiling | Source: Midjourney

As we headed inside, I couldn’t stop thinking of the cruel message on his car. I couldn’t erase that image from my mind.

“Megan? Are you listening, sweetheart?” Grandpa’s voice snapped me back to reality.

“Sorry, Grandpa. I was just… thinking. How are you feeling?”

We chatted for a while, but my mind kept drifting to that message. I needed to do something about it.

“Hey, I need to take care of something real quick,” I said, standing up. “Mom, can you stay with Grandpa? I’ll be back in a few minutes.”

A woman talking to her mother | Source: Midjourney

A woman talking to her mother | Source: Midjourney

“Sure, honey,” Mom said.

In no time, I headed down to the security office near the entrance, where I met a bored-looking guy sitting behind the desk.

“Excuse me,” I said. “I need to see the security camera footage from the parking lot.”

He raised an eyebrow as he straightened his back.

“Sorry, ma’am. We can’t just show that to anyone who asks.”

A security guard | Source: Midjourney

A security guard | Source: Midjourney

I leaned in, lowering my voice.

“Look, my grandfather lives here. He’s been very ill, and someone vandalized his car with a horrible message. I need to know who did it.”

The guard hesitated, then nodded.

“Alright, just this once.”

We reviewed the footage from the last few days when I suddenly saw an older, snooty-looking woman, heading towards Grandpa’s car. She took her sweet time to write that awful message on his car.

An older woman standing near a black car | Source: Midjourney

An older woman standing near a black car | Source: Midjourney

“Who is this?” I asked the guard.

“That’s Briana from 4C,” he said. “Always causing trouble.”

I thanked him and turned to leave, but he stopped me.

“Wait, there’s something else. I overheard some of the neighbors talking in the lobby last week. Apparently, this Briana woman has been giving your grandfather a hard time for months now.”

“What do you mean?” I asked.

He scratched his chin thoughtfully.

A security guard talking to a woman | Source: Midjourney

A security guard talking to a woman | Source: Midjourney

“Well, they were saying she’s been complaining about every little thing. Like, she’d make a fuss if his newspaper was left out too long, or if his welcome mat wasn’t perfectly straight. One of the ladies even mentioned that Briana tried to get your grandpa fined for having a potted plant that was ‘an unapproved color’ or something ridiculous like that.”

“Are you serious? Why hasn’t anyone done anything about this?”

“Most folks just try to avoid her, I guess,” he shrugged.

An older woman talking angrily | Source: Midjourney

“Your grandpa’s too nice to make a big deal out of it. But between you and me, I think everyone’s getting pretty fed up with her attitude.”

Yeah, my grandpa’s nice, but I’m not, I thought to myself before marching straight to Briana’s apartment.

The door opened soon after I knocked on it.

“Can I help you?” she asked.

“I’m Alvin’s granddaughter,” I said, struggling to keep my voice steady. “I saw what you wrote on his car. You have no right to humiliate him like that!”

A young woman talking to her grandfather's neighbor | Source: Midjourney

A young woman talking to her grandfather’s neighbor | Source: Midjourney

“I don’t care,” she shrugged. “If he can’t keep up with community standards, maybe he shouldn’t be living here.”

And with that, she slammed the door in my face.

I was livid. It was clear that talking to her wasn’t going to get anywhere, so I decided to handle it my own way. I came up with a plan to teach her a lesson. All I needed was a roll of duct tape and a paper with evidence.

A woman leaving a building | Source: Midjourney

A woman leaving a building | Source: Midjourney

The next day, I took a screenshot of the security camera footage, ensuring Briana’s face was clear, and got it printed. Then, in big, bold letters, I wrote: “SHAME! SHAME! SHAME! Lady from Apt 4C is abusing elderly neighbors.”

I taped that sign right in the elevator where everyone would see it. It was crystal clear who she was and what she’d done.

Within a day, the whole building was buzzing.

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