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!

How to Recognize Sneaky Narcissistic Traits in Mothers

Narcissism is a phenomenon in which a person with low self-esteem is afraid of losing authority in the eyes of others, and they begin to manipulate their friends, colleagues, and family to appear better than they really are. These people are so determined. We decided to imagine what it’s like to have your beloved mother like this.

They have a distorted perception of love and achievement, making it nearly impossible for them to make you feel good enough.

Their self-worth hinges on external validation and a facade of perfection. This creates a moving target for your worth in their eyes. You can achieve great things, but their praise might be laced with criticism, or they might simply shift the goalposts to a new, unattainable standard. This leaves you perpetually striving for an unachievable level of approval.

Additionally, their happiness is often transactional. They dole out affection when it suits them, leaving you confused about what truly earns their love. This inconsistency fosters insecurity and self-doubt, making you question your own value no matter what you accomplish. Ultimately, a narcissistic mother’s inability to offer genuine, unconditional love creates a core belief that you’ll never be good enough, regardless of your efforts.

Narcissistic mothers won’t let their kids’ successes overshadow their own.

Narcissistic mothers crave attention and view their children’s achievements through a distorted lens. While they might brag about their child’s successes superficially, they can’t handle being outshined. This stems from a deep insecurity and a fragile sense of self. Their child’s triumphs become a threat, rather than a source of pride. They may downplay the accomplishment, subtly criticize, or even try to one-up their child with their own past glories, all to maintain a sense of superiority.

She’s only worried about her own problems.

A narcissistic mother’s world often revolves around herself, leaving little room for her child’s emotions or experiences. Their own needs for validation and admiration take priority. They struggle to empathize with their child’s struggles, viewing them as inconveniences or attention-grabbing tactics. This is because the narcissist lacks the emotional maturity to see their child as a separate being with valid feelings. Their child’s problems become burdens to be managed, rather than opportunities for connection and support.

These mothers humiliate their children.

There are a couple of reasons why narcissistic mothers might resort to humiliating their children. One is to maintain control. By publicly criticizing, mocking, or exaggerating their child’s flaws, the mother keeps them feeling insecure and dependent. This fragile self-esteem makes the child less likely to challenge the mother’s authority or seek independence.

Another reason is to bolster the narcissist’s own fragile ego. Putting their child down creates a clear hierarchy where the mother is always superior. This can be especially pronounced if the child shows any potential to outshine the mother, triggering a need to cut them down to size. Ultimately, the humiliation serves the narcissist’s own needs for power and self-importance, leaving the child feeling emotionally bruised and diminished.

She makes kids feel guilty for getting something.

Narcissistic mothers often induce guilt in their children for receiving gifts or achieving success because it reinforces their own sense of control. They might make comments like, «You don’t deserve this, there are others who need it more,» implying the child is selfish for wanting something good. This guilt trip serves a few purposes.

Firstly, it keeps the child feeling indebted and obligated to please the mother. Secondly, it deflects attention away from the mother’s inability to be genuinely happy for her child’s good fortune. Ultimately, by making their child feel guilty, the narcissistic mother manipulates the situation to maintain the focus on themselves and their emotional needs.

She thinks she always deserves the best.

A narcissistic mother’s belief in her own deservingness stems from a distorted sense of self-importance. Deep down, she craves admiration and validation, and views herself as superior to others. This inflated ego convinces her that she deserves the best in life, regardless of her actions or contributions. It’s a constant need to be seen as special and entitled.

This sense of entitlement can manifest in various ways, from expecting lavish gifts and unwavering support to feeling justified in cutting in line or bending the rules. For a narcissistic mother, the «best» isn’t just about material possessions, but also about the constant flow of attention, praise, and control that reinforces her grandiosity.

Her love is unstable. When she needs something, she’s kind. When she doesn’t, she’s rude.

Narcissistic mothers often exhibit a transactional kind of love, where affection is dangled like a carrot. When their needs are unmet, their self-absorption takes center stage. They might become critical, dismissive, or even cold towards their child. Conversely, when they require something — maybe errands run, emotional support, or a public image boost — the kindness faucet turns on.

This emotional inconsistency leaves the child confused and insecure. They never quite know what version of their mother they’ll encounter, creating a constant state of walking on eggshells to avoid the unpredictable shift from loving to cold.

She cares too much about how other people see her.

A narcissistic mother craves external validation and uses how others perceive her as a mirror for her fragile self-esteem. Her self-worth hinges on admiration and a cultivated image of perfection. This makes her hyper-aware of how others view her, particularly in her role as a mother. She might brag excessively about her child’s accomplishments, not necessarily out of pride, but to reflect well on her own parenting skills.

Conversely, any perceived shortcomings in her child become a threat to her image. She might downplay their achievements or even criticize them publicly to maintain a facade of control and superiority in the eyes of others. Ultimately, the well-being and genuine connection with her child become secondary to managing the public perception of a perfect mother and family.

She complains about people that do something against her will.

Narcissistic mothers view any challenge to their control as a personal attack. Their rigid sense of self-importance dictates that things should go their way. When someone, especially their child, dares to act independently or disagree, it triggers a deep sense of entitlement being violated. They may lash out by complaining excessively, playing the victim, or attempting to manipulate the situation back to their desired outcome.

These complaints serve a dual purpose: firstly, to punish the person for disobeying, and secondly, to garner sympathy or support from others, further reinforcing their position of authority. Ultimately, a narcissistic mother’s complaints about those who defy her are less about the specific action and more about maintaining a power dynamic where she remains in control.

Narcissistic mothers are jealous of their daughters’ beauty. And they pretend to be caring.

A narcissistic mother’s insecurity can turn a daughter’s blossoming beauty into a source of hidden jealousy. They may outwardly offer compliments laced with backhanded remarks, like «You look pretty, but maybe try a different shade of lipstick.» This thinly veiled criticism undermines the daughter’s confidence while maintaining a facade of caring.

Deeper down, the mother might feel threatened by her daughter’s youthful beauty, a stark reminder of her own fading youth and potential loss of attention. This jealousy can manifest in various ways, from sabotaging the daughter’s attempts to dress up for an event to subtly comparing her looks to others. The narcissistic mother’s mask of concern hides a desire to control the narrative, ensuring her daughter’s beauty doesn’t overshadow her own.

She criticizes a lot but almost never gives praise.

Narcissistic mothers often fall into a harsh critic pattern for a few reasons. Firstly, their self-worth is fueled by a need for control and a sense of superiority. Constant criticism keeps their child feeling insecure and dependent, less likely to challenge their authority. Secondly, genuine praise can feel threatening to a narcissist. If their child is successful or confident, it might overshadow the mother’s own perceived importance.

Instead of celebrating their child’s achievements, they might downplay them or even resort to nitpicking flaws. Ultimately, the lack of praise becomes a tool for manipulation. By withholding validation, the narcissistic mother keeps her child striving for approval, a dynamic that reinforces her own sense of power and control.

They’re angry if someone else is in the spotlight.

A narcissistic mother thrives on being the center of attention. Their fragile self-esteem craves constant validation and admiration. When someone else, especially their child, receives praise or recognition, it’s perceived as a direct threat. This triggers a surge of anger because it disrupts their carefully curated image of superiority. They might downplay the other person’s accomplishment, subtly criticize them, or even try to steal the spotlight back to themselves with tales of their own past glories.

This anger isn’t about protecting their child, but about protecting their own inflated sense of self-importance. They can’t bear to share the spotlight, and their reaction reflects a deep-seated insecurity that can leave their child feeling confused and emotionally neglected.

Narcissistic mothers might constantly remind you of the things they’ve done for you.

One is to create a sense of obligation and guilt. By replaying a litany of sacrifices and favors, they make you feel indebted, making it harder to disagree with them or assert your independence. It’s a way to control you through emotional manipulation. Another reason is to inflate their own sense of importance.

Recounting their «good deeds» reinforces their narrative as the selfless caregiver deserving of constant praise and gratitude. Ultimately, these constant reminders are about them, not you. It’s a tactic to maintain power within the relationship and ensure you remain focused on their needs rather than developing your own sense of self.

These narcissistic traits can take a toll. But there’s good news! Our next piece dives into how these experiences shape you, and what you heal from it.

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