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!
Siblings Derrick, 4, and Harmony, 7, Lost Their Lives in the Devastating Hurricane Helene: What We Know
What began as a peaceful evening for the Taylor family quickly turned into an unimaginable tragedy. Kisses were exchanged before bedtime, with no one realizing that by the next morning, their lives would be shattered by devastating news.
Among the more than two dozen victims of the catastrophic storm in Georgia were a brother and sister, Derrick and Harmony. Their untimely deaths have left the entire community mourning, as families try to cope with the overwhelming grief of losing loved ones.
On the evening of September 26, 2024, Crystal Taylor, 34, spent time with her eldest daughter, Cassidy, 11, as they snuggled up on the couch watching “Beat Bobby Flay.” As they drifted off to sleep, Crystal kept one eye on the weather, monitoring the approaching Hurricane Helene. In the bedroom, her husband, Herbert Taylor, 39, was asleep with their two younger children, Harmony, 7, and Derrick, 4.
Though they knew Hurricane Helene was heading toward eastern Middle Georgia, the family wasn’t sure how much it would affect them inland. But as midnight came and went, the storm’s fury descended on the area, sweeping through the countryside and moving relentlessly across rivers toward Sandersville, a small town right in its path.
Around 4:00 a.m., Crystal received a call from her mother, checking if the house was still safe. Crystal reassured her that everything was fine, though the winds had picked up and a giant oak tree loomed over the backyard. Herbert, waking up, saw the wind lift the cover off his truck and moved toward the children’s bedroom to check on them.
Before he could reach them, disaster struck. The massive oak tree crashed onto the bed where Harmony and Derrick were sleeping, collapsing the house in a split second. Herbert shouted in panic, “My babies,” as the impact triggered an electrical fire. Crystal and Cassidy rushed to safety at a neighbor’s house, while Cassidy tearfully called 911.
Cassidy remained brave as she explained, “A tree fell on our house. My little brother and sister are trapped inside, and the house is on fire.” Emergency crews arrived to find the home engulfed and the oak tree blocking access to the children. Despite their best efforts, it took over five hours to cut through the tree, and by then, it was too late.
Crystal, in her heartbreak, clung to hope as she waited, imagining her children emerging safely. She could see Derrick asking for his favorite cookies and crackers, and Harmony asking for her favorite boiled potatoes made by her grandfather. But tragically, the children were gone.
The Taylor family, now grieving the loss of Derrick and Harmony, has expressed their gratitude for the outpouring of love and support. Herbert shared on social media how much the prayers and kind words have meant to them, while Crystal echoed his sentiments, thanking everyone for their care during this difficult time.
The Taylors have also been receiving generous financial support through Herbert’s Cash App, $Rick4715, as well as via a GoFundMe campaign organized by Brittany Price and Jenna Barefield on behalf of the family. So far, the GoFundMe has raised over $45,000 out of its $50,000 goal.
The page reads, “We kindly ask for your support to help the family during this devastating time, covering funeral expenses, securing a new home, and managing daily costs. Their eldest daughter also remains in their care.”
With more than 750 contributions, the Taylors are incredibly grateful for the flood of financial help, prayers, and thoughtful gestures from their community.
The Taylors, along with other affected families, are working to rebuild their lives after such a heartbreaking loss. As previously reported, Hurricane Helene has left a tragic trail of destruction, taking the lives of many, including a young boy and his grandparents. The boy’s aunt shared the heartbreaking details of their story in a lengthy post online.
According to CBS News, Hurricane Helene has claimed at least 135 lives so far. Among the hardest-hit states, North Carolina has suffered the most, with over 80 reported deaths, according to officials.
One particularly heart-wrenching account shared by the news outlet involved a mother, her young son, and her parents who were stranded on a rooftop in Ashville, North Carolina. As the floodwaters rose and their house collapsed, Megan Drye tragically watched her 7-year-old son, Micah, and her parents get swept away. While Megan was rescued, Micah and his grandparents were not as fortunate.
Megan’s sister, Jessica Drye Turner, took to Facebook to share updates about the tragedy. In her post, dated September 30, Jessica expressed the emotional toll the loss has taken on her and her family, as they come to terms with the heartbreaking reality.
“I feel a sense of peace knowing we will see them again one day,” Jessica wrote, sharing her faith in the belief that her loved ones are now with Jesus. She reflected on how the fear and desperation they experienced during their final moments have now been replaced with peace in the afterlife.
Jessica also acknowledged the immense grief her sister Megan faces, having witnessed the tragic events firsthand. “It breaks my heart that Megan will have to live with those memories, but they are no longer suffering,” she shared, adding that Megan has a long road ahead to heal from the trauma.
In a particularly poignant moment, Jessica revealed that Micah’s body had been found about a quarter of a mile from where Megan was rescued. “He was such a perfect little boy,” Jessica wrote, “He always wanted to be a superhero, and now he is.”
Jessica also shared that Micah’s final words were a plea to heaven: “Jesus! Please help me!” She concluded the post by stating that despite the grief, her faith remains strong, adopting a new motto: “New grief and strong faith.”
Jessica’s post also recounted the terrifying experience Megan endured while waiting to be rescued. Swept away by the flood, Megan found herself wedged between two trailers, where she remained for three agonizing hours before help finally arrived.
Much like Jessica, Heather’s friend, Amanda Sprouse Simpkins, also took to Facebook to share the heartbreaking news.
In her post, Amanda urged, “Please lift up Megan, Jessica Drye Turner, Heather, and their family in your prayers. Megan has suffered an unimaginable loss and is left with nothing. If you feel called to help, please consider giving. If not, your prayers are more than enough.”
Amanda’s plea referred to the GoFundMe page that Heather set up to support her sister during this difficult time.
“For Megan Drye, our miracle, who has endured every mother’s worst fear. She survived the unthinkable but has lost everything. The kindness and generosity of others will be what sustains her, helping her take one breath, one step, and one day at a time,” reads part of the GoFundMe description.
Adding another layer of heartbreak to this tragedy is that Heather chose the last photo Micah’s grandmother ever took of him for the page. The picture shows Micah, wearing a Jurassic World T-shirt, smiling happily while his grandmother is seen in the reflection of the door, capturing the moment.
Even as Hurricane Helene’s fury subsides, its aftermath continues to leave devastation across several states. Despite efforts to minimize the damage, the storm’s impact has been overwhelming.
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