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!
6 Jokes That Offer Both Hilarious and Valuable Life Lessons
Buckle up, folks! We’re about to embark on a laugh-filled journey that might just teach you a thing or two. These six jokes aren’t just your average knee-slappers—they’re packed with wisdom that’ll make you chuckle and think about writing them down.
Life has a funny way of teaching us lessons, doesn’t it? Sometimes it’s through heartbreak, sometimes through triumph, and sometimes—just sometimes—it’s through a well-timed joke that makes you spit out your coffee.
A man laughing in a coffee shop | Source: Pexels
Today, we’re diving into the world of humor with a twist: jokes that not only tickle your funny bone but also impart some genuine wisdom.
Now, you might be thinking, Jokes? Wisdom? Are we talking about fortune cookies here? Nope, we’re talking about good old-fashioned storytelling with a punchline that packs a punch and a moral that sticks with you long after the laughter fades.
So, let’s dive into these six hilarious tales that prove laughter truly is the best teacher.
A woman laughing | Source: Pexels
Joke #1: The $800 Shower Interruption
A woman was getting out of the shower when she heard the doorbell ring. Her husband was going to shower, so she quickly grabbed a towel, wrapped it around herself, and descended the stairs to open the door.
She was greeted by Bob, the neighbor who apparently missed the memo on appropriate visiting hours. Before she could ask what brought him to her doorstep, he said something that sounded too good to be true.
“I’ll give you $800 to drop that towel.”
A man standing outdoors | Source: Midjourney
Now, the quick-thinking woman did some rapid mental math. On the one hand, dignity. On the other, $800.
In no time, the towel hit the floor, and the woman stood in front of Bob without anything on.
Bob, true to his word (and probably wondering if he should’ve started the bidding lower), handed over the cash and left.
The woman closed the door, picked up the towel, and wrapped it around herself again before returning to her room.
A woman in a towel looking at herself in the mirror | Source: Pexels
Back upstairs, her husband, blissfully unaware of the impromptu peep show, asked about the visitor.
“Who was that?”
“It was Bob, the next-door neighbor.”
“Great!” he said. “Did he say anything about the $800 he owes me?”
Moral of the story:
If you share critical information pertaining to credit and risk with your shareholders in time, you may be in a position to prevent avoidable exposure.
Or, in simpler terms: Always know the full details of a deal before you strip down to the essentials!
A woman covering her mouth with her hands | Source: Pexels
Joke #2: The Genie’s Corporate Retreat Gone Wrong
It was an ordinary day for our intrepid trio: a sales rep, an administration clerk, and their manager. They were on their way to lunch when fate intervened in the form of a dusty old lamp.
Now, most people would’ve walked right past it, but our heroes weren’t most people. They decided to rub it and were shocked to see a genie pop out of it.
This wasn’t your average, run-of-the-mill genie. No, this was a genie with a strict one-wish-per-person policy.
Blue smoke coming out of a lamp | Source: Midjourney
The administration clerk, showcasing the lightning-fast decision-making skills that had kept her in an entry-level position for years, jumped in first.
“I want to be in the Bahamas, driving a speedboat, without a care in the world!”
Poof! She vanished, leaving behind only the faint scent of coconut sunscreen and poor life choices.
The sales rep went next.
“I want to be in Hawaii, relaxing on the beach with my personal masseuse, an endless supply of Piña Coladas, and the love of my life!”
A man enjoying a drink on a beach | Source: Pexels
Poof! He too disappeared, leaving behind a cloud of desperation and the lingering question of who would cover his afternoon calls.
Finally, it was the manager’s turn.
“I want those two back in the office after lunch!”
Moral of the story:
Always let your boss have the first say.
Joke #3: A Testament to Misinterpretation
Once upon a time, a priest offered a lift to a nun, and she hopped in.
A priest driving a car | Source: Midjourney
As they cruised along, the nun crossed her legs, causing her gown to reveal more than the usual abundance of ankle. The priest, suddenly remembering he was human under that collar, nearly turned their holy roller into a highway disaster.
After regaining control of both the car and his composure, the priest decided to test the waters of temptation. He stealthily slid his hand up the nun’s leg.
The nun calmly said, “Father, remember Psalm 129?”
A nun in a car looking at the driver | Source: Midjourney
The priest quickly pulled his hand back. However, he couldn’t resist for too long.
Once again, his hand embarked on its unholy pilgrimage up her leg. And once again, the nun dropped the biblical breadcrumb: “Father, remember Psalm 129?”
“Sorry sister,” the priest said.
Upon reaching their destinations, the nun went on her merry way. Meanwhile, the priest raced to look up Psalm 129.
And there it was, in black and white: “Go forth and seek, further up, you will find glory.”
A close-up of a priest reading a book | Source: Pexels
Moral of the story:
If you are not well informed in your job, you might miss a great opportunity.
Joke #4: The Lazy Bird’s Cautionary Tale
In a forest where animals apparently had nothing better to do than philosophize about laziness, a crow decided to make “doing nothing” an Olympic sport.
Perched high up in a tree, this feathered slacker was living his best life, probably contemplating the meaning of “caw” or wondering why he wasn’t born a peacock.
Enter the rabbit, the forest’s aspiring couch potato.
A rabbit in a forest | Source: Pexels
“Can I also sit like you and do nothing all day long?” he asked the crow.
“Sure, why not,” the crow replied.
So, the rabbit, feeling like he’d just won the laziness lottery, plopped himself down at the base of the tree.
He stretched out, probably thinking, This is the life. No more running, no more annoying ‘what’s up doc’ jokes. Just me, the ground, and sweet, sweet nothingness.
But alas, there’s always someone waiting to take advantage of your downtime. A fox spotted the lazy rabbit.
A fox in the wild | Source: Pexels
In no time, he pounced on the rabbit and turned him into lunch. It was a harsh lesson in the food chain.
Moral of the story:
To be sitting and doing nothing, you must be sitting very high up.
Or, to put it in modern terms: If you’re going to slack off, make sure you’re out of reach of the office predators.
Joke #5: The Turkey’s Climb to Success
A turkey | Source: Pexels
In a farmyard where dreams apparently grew as high as the trees, a turkey with lofty ambitions struck up an odd conversation with a bull.
“I’d love to reach the top of that tree,” the turkey sighed, eyeing the towering oak.
The bull, ever helpful (and full of it), offered a unique solution.
“Why don’t you nibble on my droppings? They’re packed with nutrients.”
It was the kind of advice that would make any nutritionist faint.
Close-up of a bull’s face | Source: Pexels
Surprisingly, the turkey followed the advice and after a hearty meal, she found the strength to reach the lowest branch. Emboldened by this success, she continued her dung-fueled ascent day after day.
Finally, on the fourth day, there he was, proudly perched at the treetop. Little did he know, his high-rise success story was about to come crashing down.
A farmer, spotting this out-of-place turkey, decided it was time for an impromptu Thanksgiving.
A farmer | Source: Pexels
With one shot, our ambitious bird’s dreams of greatness were quite literally shot down.
Moral of the story:
In the game of life, make sure your success is built on solid ground, not just solid waste.
Joke #6: The Bird, the Dung, and the Deceitful Cat
Picture a small bird, flying south for the winter, probably dreaming of piña coladas and tiny bird-sized sunglasses. Suddenly, the cold hit hard, and the bird dropped into a field.
A bird in the air | Source: Pexels
While he was frozen there, a cow came by and dropped a steaming pile of dung right on top of him.
Instead of being the final insult, this turned out to be a blessing in disguise.
The warm dung thawed out the bird, who, finding himself in this unlikely hot tub, began to sing joyfully. Little did he know his happiness was quite short-lived.
A passing cat was intrigued by this singing pile of dung. He quickly dug the bird out but ate him instead of offering him a towel.
A close-up shot of a cat | Source: Pexels
Moral of the story:
Life’s messy situations often teach us valuable lessons. Remember, not everyone who dumps on you is your enemy, and not everyone who pulls you out of a mess is your friend. Most importantly, when you find yourself in a deep pile of trouble, it’s often best to keep quiet and assess the situation before reacting.
Leave a Reply