Let me tell you—this story is wild, and you won’t believe what happened!
First, a bit of background. I’m Emily, 17, and a senior in high school. I live with my dad, my stepmom Carla, and her son, Mason. Despite everything, Mason and I get along like siblings usually do. But Carla? Well, she can’t stand me, and trust me, the feeling is mutual.
It all started seven years ago when my mom passed away from a cold that wouldn’t go away. Not long after, my dad started dating Carla, and within a year, they were married. I’ll never forget my aunt’s words at the wedding: “Your father didn’t waste any time, did he? And who is Carla anyway? She’s nothing compared to your mom.”
Carla seemed fine at first. She even tried to win me over, but it didn’t take long for the passive-aggressive comments to begin. I remember once, she just stared at me and said, “You look too much like your mother, Emily. It actually pains me to look at you.” She’d add digs like, “No wonder your father gives Mason more attention.” I tried to brush it off, but it stung. My dad? Clueless, of course. He didn’t see how Carla really treated me, and Carla loved that. She could say whatever she wanted with zero consequences.
Fast forward to prom season. Like any other girl, I was dreaming of the perfect night. I had saved up my babysitting money for months and finally bought a gorgeous violet dress—my mom’s favorite color. I had also booked a hair appointment at a fancy salon, where all my friends were getting their hair done too. Everything was set for my magical night… until Carla decided to ruin it.
The day of prom, I showed up at the salon, excited and ready. But the receptionist looked confused when I arrived. “Emily? I thought you canceled your appointment,” she said. I froze. Canceled? I didn’t cancel anything.
Just then, the hairdresser came over and explained that she had received a call earlier that day, supposedly from my “mom,” canceling my appointment. My heart sank, and that’s when I saw her—Carla—sitting there, getting her own hair done, with a smirk on her face. She had canceled my appointment to ruin my day.
Desperate, I asked the stylist if she could fit me in anyway, but there were no openings left. I walked out of the salon in a daze, devastated. My perfect prom night was unraveling before my eyes, and by the time I got home, I was in tears, locked in my room, trying and failing to do my own hair. It looked awful, and I felt defeated. I didn’t even want to go to prom anymore.
But just when I thought the night was ruined, I heard loud honking outside. At first, I ignored it, thinking it was just a car passing by. But it didn’t stop, so I dragged myself to the window—and my jaw dropped. A sleek black limousine was parked in front of our house. Was this for me?
I ran downstairs just as the driver stepped out and asked for “Miss Emily.” My dad, confused, handed me a small card. Inside, in neat handwriting, it read: To my beautiful sister, Emily. I know you’ve had a rough time, but you deserve the best night ever! Enjoy the limo, and don’t worry about a thing. Love, Mason.
Mason? My 11-year-old stepbrother had planned all of this! He overheard Carla canceling my hair appointment, so he took matters into his own hands. Using money Carla had stashed away for a fancy necklace she wanted, Mason rented the limo and even arranged for a neighbor’s daughter—who worked as a stylist—to come over and do my hair and makeup.
Twenty minutes later, I went from crying in my room to looking like a princess. I couldn’t believe Mason had done all of this for me. When Carla pulled into the driveway and saw me stepping into the limo, her face turned red with shock. She had no idea how Mason had outsmarted her, and I wished I had a picture of her expression to hang on my mirror!
Prom turned out to be everything I had hoped for. When I arrived at the venue in the limo, heads turned, and I felt like a star. For the first time in a long while, I felt my mom’s presence with me, and the night was pure magic. As for Carla, I hope she learned her lesson—you can’t mess with someone’s happiness and expect to get away with it, especially when their little brother is there to save the day!
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:
- Follow the Financial Basics
- Find Out How Much Equity You Have
- Set Your New Home-Buying Budget
- Find the Right Dream Home for You
- 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!
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