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!

Science Shows That Women Sleep Better Next To Dogs Than Men

The importance of sleep for one’s health should go without saying. The ideal approach to obtain restful sleep is a topic of great interest to a large number of researchers. But forget about meditating before bed and drinking chamomile tea. It has been found that women sleep better when their dogs are nearby. That’s correct, a study by Canisius College in New York State revealed that dogs make more comfortable sleeping companions than either people or cats.

Christy Hoffman, Ph.D., an animal behaviorist and the study’s chief researcher, said, “We found that women commonly rate dogs as better bed partners than cats and human partners and report that their dogs enhance their sleep quality.”

According to Research, Women Sleep Better Next to Dogs

Hoffman arrived at these conclusions after surveying almost a thousand American women. According to the findings, 31% of the participants and 55% of the participants shared a bed with a cat or a dog. Moreover, 57% of these ladies slept in the same bed as a human companion, compared to the other 40%.[1]

Hoffman also found out why dogs appeared to be the most comfortable bedmates.The first explanation is that dogs’ sleeping habits more closely reflect human sleep patterns than those of cats.

Hoffman stated, “It is not surprising that dogs and cats have different sleep schedules because dogs’ major sleep periods tend to coincide more closely with humans’ than do cats’.”

Even though these similar sleeping habits might have advantages, additional research is necessary to be certain. However, Hoffman has some ideas about how this might function.

She said, “Dogs may be better at accommodating their human’s sleep schedule than human bed partners.” Human bed companions frequently go to sleep and wake up at significantly different times from one another. Sleep disruption is undoubtedly a result of schedule discrepancies between spouses. It’s possible that canine bed companions adjust to their owner’s schedule more easily than do human bed partners.

Dogs also need specific routines and obligations, like an early morning stroll. These kinds of regimens support their users in sticking to a schedule, which enhances the quality of their sleep.

Calm and Safety

Dogs also have a tendency to remain rigid during sleep. Anyone who has ever shared a bed with a fidgety partner understands how annoying they can be. Nonetheless, the study’s female participants stated that, in contrast to cats, who tended to come and go, their dogs spent the most of the night on the bed.

This implies that cats might be more prone than dogs to disturb sleep by getting in and out of bed at different times. Furthermore, Hoffman stated, “We discovered that dog owners tended to go to bed and wake up earlier than cat owners and also adhered to more regular bedtime and wake time schedules.”

The third and most crucial reason is that dogs provide their owners a sense of security.more so than in relationships with humans or even cats.

“Some dog owners may find solace in the knowledge that their pet will notify them in the event of an intruder or other emergency; also, a dog’s barking may dissuade a possible invader. Hoffman stated that whereas a dog may offer psychological consolation, a cat is less likely to assume this function.

The Ideal Sleep Partner

Dogs are the ideal sleeping companions, according to the study, although their advantages vary depending on the situation.A dog might, for instance, snore or overheat the bed. Furthermore, a lot of owners report that their cats aid in their ability to go asleep.

Remember that the study relied on the volunteers’ perceptions of the effects of their pets on the quantity and quality of their sleep. Therefore, further impartial study is required before it can be said with certainty that dogs make better sleeping companions. Nonetheless, Hoffman thinks that since pets are common in American homes, these research might be helpful.

“This line of research will be valuable to develop a clearer picture of the contexts under which co-sleeping with a pet may be detrimental to one’s sleep quality, and the contexts under which pets and their presence in their owner’s bed may positively impact sleep quality,” the spokesperson stated.

For example, studies have indicated that women sleep better on their alone than in the company of a human, but many people hold the opposite view. In the future, scientists may employ Fitbit-like gadgets to measure people’s sleep quality objectively under various sleeping scenarios.

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How to Own Your Dream Home