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!
Entitled Hotel Guest Mocked My Mom Who Works as a Maid, so She Taught Her Never to Mess with Housekeeping Again
Entitled Hotel Guest Mocked My Mom Who Works as a Maid, so She Taught Her Never to Mess with Housekeeping Again
When a devoted hotel maid is tormented by a wealthy and arrogant guest, she devises a plan that turns the tables in the most unexpected way. Instead of seeking revenge with anger, she orchestrates a quiet but powerful act of defiance that forces the cruel woman to face the bitter consequences of her actions.
Woman cleaning a hotel room | Source: Pexels
My mother has always been a source of inspiration for me. As a maid at a fancy local hotel, she takes immense pride in her work. She treats every room as if it were her own, ensuring everything is spotless and welcoming for the guests.
Recently, however, she had an encounter that tested her patience like never before. It all started on a seemingly ordinary day. My mother was assigned to clean room 256, which was occupied by a young woman named Ms. Johnson.
Woman in uniform beside hotel room bed | Source: Pexels
From the moment she stepped into the room, my mother could sense the woman’s dislike for her. Ms. Johnson lounged on the bed, scrolling through her phone, barely acknowledging my mother’s presence.
As my mother meticulously cleaned the room, making sure every surface was spotless, Ms. Johnson suddenly knocked her coffee cup off the table, sending dark liquid spilling onto the freshly mopped floor. She didn’t even flinch. Instead, she looked my mother straight in the eye and sneered, “Clean that up!”
Coffee mug falling | Source: Pexels
My mother’s heart sank. She had worked so hard to make the room perfect, only to see her efforts so carelessly undone. But she knew she couldn’t afford to lose her job. It provided her with a sense of independence and stability for our family.
A person vacuuming a rug | Source: Pexels
Swallowing her pride, she silently cleaned the floor again, all while feeling Ms. Johnson’s piercing gaze on her. As she worked, the woman laughed. The mocking giggle echoed through the room. “Well done for a maid. You didn’t even talk back to me,” she taunted, her voice dripping with sarcasm. “Tomorrow, I’ll come up with something more interesting for you.”
Woman standing near table with pastries | Source: Pexels
My mother finished her task, holding back tears. She knew showing any sign of distress would only give the woman more satisfaction. That night, as she recounted the story to me, I could see the hurt in her eyes. But there was also a spark of determination. She wasn’t going to let this entitled guest break her spirit.
Mother and daughter sitting at the table holding hands | Source: Pexels
The next day, my mother went to work with a plan. She knew Ms. Johnson would try to humiliate her again, but this time, she was ready. She was determined to show this woman that kindness and respect were not weaknesses and that underestimating the resolve of someone who works with dignity and pride was a grave mistake.
Woman holding a plastic basin with cleaning materials | Source: Pexels
Around mid-morning, my mother walked into room 256 with a steely determination. She had a plan. Sure enough, there she was, Ms. Johnson, reclining on the bed, her smirk already in place.
“Oh, look who’s back,” Ms. Johnson said, her voice dripping with disdain. “Let’s see what mess I can make for you today.” She reached for her coffee cup, a mischievous glint in her eyes.
Woman leaning on handrail in a hotel room | Source: Pexels
My mother kept her composure. She knew what to expect. Without a word, she began her cleaning routine, methodically and efficiently, refusing to rise to the bait. As she moved around the room, she noticed something important: Ms. Johnson’s laptop was left open on the table, the screen glowing with unattended work.
“Excuse me, ma’am,” my mother said in her most polite tone. “I need to dust the table. Would you mind closing your laptop?”
Person using phone with laptop on desk | Source: Pexels
Ms. Johnson huffed and rolled her eyes. “Fine,” she muttered, snapping the laptop shut and placing it to the side with an exaggerated sigh. “But hurry up. I have important work to do.”
“Of course, ma’am,” my mother replied, her voice steady.
Woman relaxing in a hotel room | Source: Pexels
“You’re slower than yesterday,” Ms. Johnson remarked, her voice dripping with sarcasm. “Do they not teach speed in maid school?” My mother ignored the jab, focusing on her task.
Ms. Johnson’s impatience was palpable, and she drummed her fingers on the bedside table. “Done yet?” Ms. Johnson snapped.
Woman tiding up a hotel room | Source: Pexels
“Almost, ma’am,” my mother replied calmly.
Just then, the door opened, and Mr. Ramirez, the hotel manager, appeared. He glanced around the room, his sharp eyes taking in the scene. “Good morning, Ms. Johnson,” he greeted her warmly.
“I trust everything is to your satisfaction?”
Hotel manager entering a room | Source: Pexels
Ms. Johnson scoffed. “It’s fine. Your maid here is just clumsy and slow.”
Mr. Ramirez frowned slightly. “I’m sorry to hear that. Our staff is trained to provide excellent service.”
“Well, maybe she needs more training,” Ms. Johnson said, casting a disdainful look at my mother.
Mr. Ramirez turned to my mother, concern evident in his eyes. “Mrs. Adams, is there a problem?”
My mother met his gaze with her calm and professional demeanor. “No, Mr. Ramirez. Everything is under control.”
A chambermaid holding a stack of towels | Source: Pexels
Mr. Ramirez nodded, though his concern lingered. “Ms. Johnson, I assure you, we will make sure your stay is as comfortable as possible.”
Ms. Johnson waved dismissively. “Just make sure she doesn’t break anything.”
Mr. Ramirez gave my mother an encouraging smile before leaving. As the door closed behind him, my mother felt a surge of quiet confidence. She was ready for whatever Ms. Johnson had in store next.
Woman fixing pillows on the bed | Source: Pexels
My mother continued her work, but she had one more trick up her sleeve. She knew Ms. Johnson would never learn unless she experienced a bit of discomfort herself.
As she finished cleaning, my mother subtly dropped a small, harmless but unpleasant-smelling packet under the bed. It was a trick she had learned from an old colleague, a mixture that would release a gradually intensifying odor over time. It wasn’t immediately noticeable, but within a few hours, it would become quite bothersome.
A tidy hotel room | Source: Pexels
“All done, ma’am,” my mother said standing up and gathering her cleaning supplies. “Have a pleasant day.”
The next morning, my mother arrived at work and was immediately greeted by the sight of Ms. Johnson in the lobby, furiously arguing with Mr. Ramirez. Her face was flushed with anger, and her voice carried through the lobby.
Man and woman standing in a hotel lobby | Source: Pexels’
“I can’t stay in that room! It smells awful! How can you expect guests to stay in such conditions?” Ms. Johnson was practically shouting, drawing the attention of other guests and staff members.
Mr. Ramirez, ever the professional, maintained his calm demeanor. “I’m very sorry to hear that, Ms. Johnson. We take such matters very seriously. We’ll investigate the cause of the smell immediately and move you to another room in the meantime.”
Two people standing at a hotel entrance | Source: Pexels
Ms. Johnson, still fuming, stormed off, her heels clicking sharply against the polished floor. Mr. Ramirez turned to my mother, who had been quietly watching the scene unfold.
“Mrs. Adams, could you please check Ms. Johnson’s room and see if you can find the source of the smell?” he asked, his voice calm but concerned. “Of course,” my mother replied, hiding a smile. She headed to room 256, her heart pounding with satisfaction.
A clean hotel room | Source: Unsplash
Inside the room, my mother quickly found the packet she had placed under the bed and discreetly removed it. She then opened the windows and turned on the fan, allowing fresh air to circulate and clear the odor. As she worked, she couldn’t help but feel a small surge of triumph. Ms. Johnson had finally tasted a bit of her own medicine.
Woman carrying a stack of towers | Source: Pexels’
As she left the room, she ran into Mr. Ramirez in the hallway. “Did you find the source of the smell?” he asked.
“Yes, Mr. Ramirez,” my mother replied. “It seems something had been left under the bed. I’ve removed it and aired out the room. It should be fine now.”
“Thank you, Mrs. Adams,” Mr. Ramirez said, a hint of relief in his voice. “You’ve done an excellent job, as always.”
Hotel worker doing room service | Source: Pexels
My mother nodded and continued with her day, knowing that sometimes, justice is served in the smallest of actions. But that wasn’t enough. My mom had one more lesson to teach Ms. Johnson.
The next day, she was assigned to help move Ms. Johnson’s belongings to another room. As usual, Mom did her job efficiently, ensuring every item was carefully placed in the new room.
Delivery man holding a cardboard box | Source: Pexels
Later that afternoon, a courier arrived with a package for room 256; Ms. Johnson’s previous room. Aware that Ms. Johnson had moved to room 312, Mom saw this as her chance to deliver a delayed but impactful lesson.
“Excuse me, sir,” she said to the courier, stepping forward with a polite smile. “The guest in room 256 has been moved to room 312. You can leave the package at the front desk, and I will ensure it gets to her.” The courier nodded, handing over the package. “Thank you. I appreciate it,” he said, already turning to leave.
A person holding a package | Source: Pexels
My mother took the package to the front desk and, with a smile, placed it in the corner behind some other deliveries, making sure it would not be found immediately.
The next day, Ms. Johnson was in a frenzy. She was preparing for her flight and an important event later that evening. Suddenly, she realized something crucial was missing. She frantically called the front desk, her voice shaking with panic.
An angry woman in aa grey tank top | Source: Pexels
“I had a package delivered to room 256. Where is it? It has my plane tickets and my dress for tonight’s event!” Ms. Johnson’s voice was a mix of anger and desperation.
The front desk clerk, taken aback by her intensity, quickly checked the records. After some confusion and a hurried search, they found the package tucked away in the corner. The clerk immediately called my mother to deliver it to Ms. Johnson’s new room, 312.
Receptionist making a phone call | Source: Pexels
My mother, with a calm and measured pace, made her way to the room. She knocked on Ms. Johnson’s door, her expression serene. The woman yanked the door open, her eyes wide with anxiety. “Where have you been? I’ve been waiting for that package!” she snapped.
“Here is your package, ma’am. It was delivered to the wrong room,” my mother said sweetly, holding out the package.
A person holding a brown box | Source: Pexels
Ms. Johnson snatched the package from her hands and ripped it open. Her face fell as she realized the delay had cost her dearly. The tickets were now useless, and she had no time to prepare for her event. Frustration and defeat were etched into her features. She could only muster a weak, “Thanks,” before slamming the door in my mother’s face.
Mom walked away, a slight smile playing on her lips. She knew she had given Ms. Johnson a taste of her own medicine, all without stepping outside the bounds of her duties. It was a quiet victory, but a deeply satisfying one.
Woman standing under a chandelier of a hotel room | Source: Pexels
When my mother told me about the incident later, I could see the relief in her eyes. “Sometimes,” she said, her voice soft but firm, “the best revenge is simply letting people experience the consequences of their own actions.”
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