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!
Queen Camilla’s ‘secret’ role to help Kate Middleton, revealed
Other members of the royal family have had to step up while King Charles and Kate Middleton endure cancer treatment. The treatment started in January when King Charles first received his diagnosis and Kate had abdominal surgery. The agenda has altered as a result of the enormous responsibilities that Prince William and Queen Camilla have taken on.
Given the dearth of working royals in recent months, Prince William and Queen Camilla have received accolades for their work ethic, but it has also had a cost.
Queen Camilla and Kate Middleton share a lot of similarities. Since they are both married into the royal family, they have occasionally had to face with intense public and press attention. In Kate’s instance, it was only a few weeks prior, as her Mother’s Day photo proved to be staged. Though it has been a difficult time, the Princess of Wales has received a lot of support, not the least of which has come from Queen Camilla, who has gracefully demonstrated her support.
The royal family is enduring a really trying period. Kate Middleton revealed her cancer diagnosis to the world last week. King Charles has been fighting cancer since January.
The Princess of Wales had stomach surgery in January, but her precise medical status was unknown until this week. For months, there have been rumors circulating regarding her well-being and her union with Prince William. However, when Kate shared the moving video on Friday via the Prince and Princess of Wales’ social media accounts, it effectively silenced conspiracy theories and the several celebrities who had been making fun of her online.
Kate Midleton’s declaration of cancer
In full, Kate Middleton’s statement said:
I wanted to take this chance to personally thank you for all of the kind words of encouragement and for your patience while I was healing from surgery.
Our entire family has had a very difficult few months, but I am so grateful to my wonderful medical staff for their excellent care.
I had extensive abdominal surgery in January in London, and the diagnosis was first ruled out as cancer. The procedure went well. On the other hand, postoperative tests revealed the presence of malignancy. Consequently, my medical team recommended that I start a prophylactic chemotherapy course, which I am currently undergoing.
Naturally, this was a major shock, and for the benefit of our small family, William and I have been doing everything in our power to digest and deal with this secretly.
It has taken some time, as you may imagine. In order to begin my treatment, I had to take some time to heal from a significant operation. Above all, though, it has taken some time for us to convince George, Charlotte, and Louis that everything will be alright and to explain everything to them in a way that is suitable for them.
I am well and gaining stronger every day by concentrating on the things that will support my mental, physical, and spiritual healing, as I have stated to them.
William is on my side, which gives me a lot of comfort and confidence. As is the affection, encouragement, and kindness so many of you have shown. It is really important to both of us.
We sincerely hope you will appreciate that, as a family, we now require some privacy, space, and time as I finish my therapy. I have always found great delight in my profession, and I look forward to returning when I am able, but for the time being, I must prioritize my full recovery.
I’m also thinking of everyone whose life has been touched by cancer right now. Please don’t give up or lose hope for anyone dealing with this illness, no matter how it manifests itself. You’re not by yourself.
“Please don’t give up hope or faith.”
Prince William stepped up and took on a lot of responsibilities while Kate Middleton had surgery. In addition to providing care for the couple’s three children, Prince George, Princess Charlotte, and Prince Louis, he has assisted Queen Camilla with royal tasks while the king and princess heal.
The future king is definitely a hands-on father who helps out around the house more than anything else, including running the kids to and from school.
Similar to Prince William, Queen Camilla has gained a lot of recognition lately. She has had a very difficult time in the royal sphere because of the press and British public’s disapproval of her early relationship with King Charles. Still, things have changed.
Growing in popularity, Camilla has received recognition for her dedication, particularly for managing her royal responsibilities while King Charles is receiving cancer treatment.
During King Charles’s cancer treatments, Queen Camilla received recognition for her dedication.
Even this week, GB News featured royal analyst Angela Levin, who said that Queen Camilla is “holding the royal family up.”
“After all, waiting until you’re 73 years old to assume the throne is a long time.” At his age, it’s undoubtedly quite difficult, but he’s incredibly determined, and he’s only really just begun to rule,” Levin remarked. “Queen Camilla is fully supporting him, standing by his side, attending all the events that they would have attended together if she hadn’t been invited.”
He will be able to sense that it is still running and moving in this manner, and they will be able to converse about it. And that’s fantastic, in my opinion. She is being strong and supporting the Royal Family, after all. Imagine that thirty years ago, everyone predicted that the Royal Family as a whole would fall apart and that she would become useless.
According to Levin, Camilla has disclosed that she dislikes being in the spotlight. When she meets members of the public, though, she makes people laugh and has become quite “accessible.”
“In order to help her spouse. Given that they were together for more than 50 years—before they were even married—she knows him extremely well. Angela Levin continued, “It’s a long time and they make each other laugh,” on GB News.
Kate Middleton’s public image suffered greatly after the Duke and Duchess of Sussex made discoveries that led to her conflict with Prince Harry and Meghan Markle, but the princess hasn’t seen any media criticism since she was named an official member of the royal family.
Kate Middleton receives backing from Queen Camilla through public criticism.
Of course, the video announcing her cancer diagnosis revealed the reason for her quiet. Nonetheless, others have argued that it was already terrible enough that she released a photo of herself and her kids that had been altered.
Camilla became into a vital source of support for the Princess of Wales as Kate Middleton came under intense scrutiny following the Mother’s Day photo.
As stated by Camilla Tominey, assistant editor of The Telegraph, in a Today interview, the queen “has been trying to help [Catherine] through the media storm aspect in all of this.”
Tominey stated, “I believe Camilla provided some support prior to [Catherine] making the announcement because she was having to deal with the fallout of everything that was said about the Mother’s Day photo and everything else.”
“Because, let’s be real, Camilla is familiar with the challenges of being in the media. She continued, “She understands what it’s like to guide kids through a media maelstrom.
Queen Camilla is the one member of the royal family who truly understands what it’s like to be under constant scrutiny from the public and media.
Then-Prince Charles admitted to being unfaithful to Diana in 1994. Although that was the first time Charles had acknowledged the allegations, the name of his mistress remained a secret.
But in that month, Jonathan Dimbelby published an official biography of Charles, establishing that Camilla was the woman he had been seeing.
Following the revelation of her relationship with Charles, Queen Camilla was terrified to leave her home.
It was unknown how much the now-queen was impacted by her affair with Charles being made public. However, royal analyst Angela Levin, author of Camilla, Duchess of Cornwall: A Royal Survivor, disclosed in a 2023 interview with OK Magazine that Camilla had to put up with “torrents” of abuse from the general population.
She was so frightened of going shopping that she wouldn’t even leave her house.
She was portrayed as the world’s most nasty lady, therefore it was quite difficult for her. She was referred to as a “rottweiler” on a regular basis, so Levin claimed that it must have surprised her much that people thought such horrible things about her.
“I don’t think Charles realized how awful it was for her,” Levin continued. Camilla didn’t have protection officers at the time because she wasn’t a member of the Royal Family, and he was frequently gone on engagements while working hard for the nation and Commonwealth. However, Charles paid for her protection after realizing what had happened.
As time passed, Camilla’s popularity with the general public grew. Angela Levin believes she “must still bear the scars of it all,” despite this.
Regarding Queen Camilla’s role as a senior royal, what are your thoughts? Kindly spread the word about this article to express your thoughts and to wish Kate Middleton and King Charles the very best during their cancer treatments.
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