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:

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!

Sir Elton John, 76, raises his two sons not to be spoiled as they already do chores for some pocket money

David Furnish, Sir Elton John’s spouse, and they have been together for more than 20 years. The couple is also raising their two boys, Zackary and Elijah, to be modest and aware of the worth of money.

Famed artist Sir Elton John has released thirty-two albums to far and shows no signs of slowing down. Even at seventy-three, the vocalist continues to be in high demand.

Sir Elton John and David Furnish in London in 2001 | Source: Getty Images

David Furnish and Sir Elton John in London in 2001 | Photo courtesy of Getty Images

Despite having a successful career for more than thirty years, the musician wants to concentrate on other areas of his life, such as his marriage to David Furnish and his two sons, Zachary and Elijah.

A brief romance blossomed between John and Furnish in 1993, before their lives got consumed with parenting their sons. The singer of “Sacrifice” announced that he had moved back into his Windsor home and was looking to socialize.

John then requested a friend to invite Furnish and other individuals to dinner, saying he felt an immediate connection with Furnish. John admired how well-groomed and reserved he was.

After going on a date the next day, the two’s long-term relationship officially started. After nine years of being in a civil partnership, they made the decision to tie the knot in 2014.

The pair used Instagram to send out invites. The highlight of the day was spending time with their sons, who had the important duty of serving as ring carriers.

Furnish and John found great joy in sharing their partnership with their children, particularly considering the difficult road they had to go to become parents. It all began in 2009 when they were acquainted at an HIV orphanage with a young boy from Ukraine named Lev.

Lev came from a shattered family, so the couple wanted to help him, but the government wouldn’t let it because he was too old. Still, the couple assisted Lev and spoke with him.

John came to the realization that he may be a father after meeting Lev. He acknowledged that he had always believed he was too old to have children. Zachary, their first son, was born in 2010 through a surrogate, and Elijah followed in 2013.

Bringing Up Children Outside of the Media
The couple desired to be actively involved with their children while leading a hectic lifestyle. “We don’t want to entrust housekeepers and nannies with raising our kids,” Furnish stated. The couple decided that having boys was the best course of action, and now their primary objective is to raise their sons in a happy and healthy environment.

John expressed to his sons in a touching letter how much they had altered his life. “You two are the best gifts I have ever received, Zachary and Elijah. In ways I never imagined imaginable, you have given my life meaning and purpose and filled my heart with love,” the singer added.

Furnish and John are content with the lovely family they have created. The love and support their children will always have from their parents is something they do not want them to forget as they grow older.

John talked candidly about how becoming a parent has altered his outlook on life and some of the values he and his spouse want their kids to grow up with.

John talked about how having children affected his attitude toward money. Having two children of his own now, he values his time with Zachary and Elijah more than a popular song or artwork.

The singer acknowledged that because he and Furnish were used to living as the center of attention, they had spent a lot of money before having children. However, John claimed that since their sons arrived, they had drastically cut back on their spending.

The couple’s current concern is ensuring that they own only what they require. Additionally, the couple has been instilling in their kids the importance of money and the labor required to acquire it.

Although John is aware that his kids have a privileged existence already, he still wishes they had humility. The artist has stated that he does not intend to leave them his whole estate as a result. Rather, he aims to strike a balance between providing his kids with a wonderful life and keeping them grounded. He thought to himself:

Naturally, I would like to leave my boys in a very secure financial situation. But giving children a silver spoon is a poor idea. Their lives is ruined by it.

John has attempted to instill in the boys an appreciation for money since they were young children. Zachary and Elijah may not have realized how well-known their parents were at the age of five and three, but John and Furnish did teach them a valuable lesson about budgeting.

The singer said in 2016 that doing chores around the house, such the kitchen or garden, would earn them £3 ($3.74) in pocket money. Each coin would then be divided between savings, spending, and charity. As they grew older, their responsibilities included tidying their rooms, and they received stars for each task completed.

Although the couple is aware that their children would not have a typical childhood, they nevertheless make an effort to give their lives some degree of normalcy. According to John, his children are “not stuck behind the gates of a mansion,” but rather live like locals.

When questioned if he was afraid of having his kids in the spotlight, he replied that he knew there would be drawbacks but that he didn’t mind at all because he thought people were “brilliant” and “not hostile,” especially when they wanted to see pictures of him and his family.

The musician and his spouse would take their kids to the movies or out for pizza because they want them to spend quality time with their family somewhere else than their mansion.

Because of his celebrity, John does not want to miss out on special times with his kids. The musician is also prompt in picking up and dropping off his youngsters at school.

Elton John Flaunts His Offspring
The “Rocket Man” singer posted a unique picture of Furnish, their sons, and their godmother, Lady Gaga, on social media, while John and his spouse typically don’t post any pictures of their sons online. The musician conveyed his love despite expressing his regret at missing the opportunity to picture with them.

Comment on Elton John's page | Source: Instagram/eltonjohn

On Elton John’s page, leave a remark | Source: Instagram/eltonjohn
Fans expressed disbelief at Zachary and Elijah’s growth in the comment section. “However, the boys are growing quite tall.” Very attractive tiny fellas, a commenter commented. Another admirer exclaimed, “Look at these gorgeous boys and their pappa and Godma!”

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How to Own Your Dream Home