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!

Recognize her? Better sit before you learn her true identity…

Joan van Ark was born on June 16, 1943, in New York City, New York. Her parents were not connected to the film industry.

When Joan was a teenager acting in Denver, she met actress Julie Harris, and their lives would never be the same.

Julie pushed her to go to the highly regarded Yale Drama School and gain admission using a scholarship she had also set up.

This made Joan Van Ark the second-ever woman to enroll at the Drama School

She [Harris] wrote to the dean and asked him to meet me. “Long story short, my parents drove me to New Haven, Connecticut, to meet the dean, who gave me a scholarship,” Joan recalled.” It was meant to be.” Joan went on to perform in the theatre for a few years, but her real passion was in Television.

Temperature’s Rising, Spider-Woman, and Days of Our Lives

Joan achieved enormous renown as a result of her roles in Temperature’s Rising, Spider-Woman, Days of Our Lives, and even one Bonanza episode. But her role as Valene Ewing on Dallas in 1978 was where she first achieved great popularity. She ended up playing the most important role she has ever had.

Because of how popular the show was, Joan appeared on its spin-off, Knots Landing. a program that was actually written prior to Dallas. Dallas was initially chosen by the producers because it was the best option for portraying affluent households at the time. Joan was then forced to play the same part in Dallas instead of joining the Knots Landing cast.

13 Seasons of Knots Landing ensued for Joan Van Ark

The person who actually convinced Joan to accept the part while already working on two other projects was her husband, renowned newscaster John Marshall. There was a moment when Val Ewing’s mother was scheduled to make her television debut. Surprise, surprise—Julie Harris was chosen for the position. The person who mattered the most to her in all the world was this.

“When the producers told me they had finally last someone to play my mother, I held my breath,” she recalled in a 1984 interview with Florida Today. “I thought, ‘Oh my God, are they going to say Phyllis Diller or Zsa Zsa Gabor, or who?’ Then they said it was Julie Harris, and I went right through the roof. I couldn’t believe they had picked her to be my mother. They didn’t even know we were friends.”

327 Episodes later, Joan Van Ark was ready for new ventures

13 Seasons and 327 episodes later, Joan left a season before the show saw its final season air. She knew many blamed her leaving on the cancellation of the show, but she was ready for new adventures. “I have loved more than life the 13 years I’ve had on that show,” she said. “[Knots Landing creator] David Jacobs is a great influence on my life, has taught me so much about so many things.”

“Ted [Shackelford] is the other half of every breath I take on the show, and personally, he’s a large part of my heart. The people are my family–we have shared marriages, deaths, and divorces. It’s far more difficult to leave than I thought.” Joan thereafter appeared on The Young and The Restless as Gloria Fisher.

In high school, John Marshall first met Joan, and the two quickly got married. They have a lovely daughter named Vanessa Marshall who works in the entertainment industry at the moment. After 56 years of marriage, the pair is still very much in love and leads extremely private lives away from the spotlight.

78 years old with a net worth of $10 million

At 78 years old, Joan has amassed a $10 million net worth and is still as gorgeous as ever when seen out and about in Los Angeles. She was last seen three years ago and was just seen paying for parking at a meter while wearing workout clothes and a ponytail.

She co-starred in the 2017 television film Psycho Wedding Crasher, which was her most recent and final appearance on screen.

Joan Van Ark, who has worked in the film industry for the past 50 years, has joined The Actor’s Studio as a life member. What an icon!

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How to Own Your Dream Home