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!

19 Tips That Can Help You Spot a Fake Item

In 2013, counterfeit goods worldwide accounted for $461 billion. Nike is the most counterfeited brand globally, and Ray-Ban, Rolex, Supreme, and Louis Vuitton are the most copied brands worldwide. And while some copies look almost identical to the originals, there are slight differences we think you should know about.

At Bright Side, we want you to know how to recognize a fake product and the differences between originals and counterfeits in some of the most popular brands.

1. Nike shoes

  • Nike Air sneakers have a texture that counterfeit manufacturers cannot imitate. This is because their materials are different, and so are their devices. Thus, in authentic Nike shoes, you will notice a hardness in the leather that will be missing in the counterfeit ones.
  • You will also need to examine the symmetry of the sneakers. If something looks asymmetrical, then it may be a counterfeit product.

2. Ray-Bans

  • Authentic Ray-Ban lenses with plastic frames are made in one whole piece. If it’s a metal frame, then the central part must look neat and can have small details but no protruding points.
  • Most often, the lenses are made of real glass, but some can be made of plastic. To know if yours is one of them, go to the manufacturer’s official website.
  • In the upper right corner of the right lens, you can find the inscription of the Ray-Ban logo. It is engraved on the surface of the lens, so it is impossible to erase it.
  • On the outside of the temples, there should also be an inscription detailing the manufacturer. In addition, the item’s serial number is usually on the left side and the country of manufacture on the right side.

3. Fila shoes

  • If you look at the letter “F” on your Fila shoes, you will notice that there is some irregularity in the stitching. This is perfectly normal on all original Fila shoes. What is not normal is for the letter “F” to be really sharp on the top two edges. On the fake shoes, these edges almost touch the square surrounding the logo, which should not be the case.
  • Next, look at the details of the toe cap, especially the holes in the front. There should be the same distance between each hole, but if not, you probably bought a fake pair of sneakers.
  • In addition, the heel logo may be completely different. On the original sneakers, that logo is the same as the one on the tongue.

4. Burberry scarf

  • The authentic scarf always has well-defined lines and a dense texture.
  • The fringe yarns in a scarf should be well rolled and spaced apart, they do not fall apart when touched.
  • The brand name on the label attached to the article must be written in capital letters. Also, the label must contain information about the country of manufacture and the composition of the scarf.

5. Gucci handbags

  • First, you should examine the two “G’s” on the front of your bag. The serifs of the G’s should be long and sleek looking and not thick. Also, the rounded part of the G should be a perfect oval and not pointed. If the logo looks blurry, it is probably fake.
  • Look closely at the stitching, as a genuine Gucci bag will have even stitching. If the stitching on your bag looks uneven in places or is a different color than the bag itself, then you should assume it is a counterfeit.

6. Supreme sweatshirt

  • On the collar of this brand’s hooded and non-hooded sweatshirts, there are two dark red labels. On the first, larger, is written the name of the brand with the letter R in a circle. On the second, you’ll find the country of manufacture: Canada. There should be a recommendation not to iron the item on the inner label, where you can find the care instructions. Manufacturers of replicas often forget this detail.
  • On sweatshirts with embroidered logos, the location of the letters on the red part should be uniform, and the distance between the two should be adequate. If you turn the authentic sweatshirt inside out, you will see a fine mesh of white threads on the back of the logo.
  • Supreme complements the hoods of its sweatshirts only with flat laces, which are carefully tied at the ends. Round laces, burned at the ends, or laces with different types of terminations are a sign of counterfeiting.

7. Adidas Yeezy tennis shoes

  • First, you have to check the wave pattern on the original Yeezy, which should be sideways with irregular wave prints.
  • Next, you can check the tongue of the sneakers. The original Yeezy’s tongues are more curved, while the fake ones look much straighter.
  • Check the inside of the shoes and see if the Adidas icon is the same size on each shoe. On some occasions, you may notice that their size differs.
  • The stitching on the inside should also be checked, as it may look suspiciously amateurish.

8. New Balance sneakers

  • New Balance sneakers have brand symbols on the back, tongue, the side of the sneaker, and the side of the sole, on the sole itself, and the insoles. The logo in the shape of the letter N on the side of the sneaker is made in the form of a patch.
  • The original slippers have a soft sole, made of foam material, easily compresses and quickly returns to their original state. The sole protector is made of rubber. The insoles of authentic New Balance shoes have a perforation, logo, size, and information about the model.

9. Toms espadrilles

  • The first thing to check is the insoles of your espadrilles. If they can be removed, your footwear is likely fake, as the original insoles are sewn to the bottom.
  • Next, you can check the back of the espadrille to look at the logo. The letters of the original brand are perfectly balanced and square. However, the letters of the fake brand are pointed and unbalanced (note the odd shape of the letter “O”). Also, the stitching around the label appears thicker on the fake ones.
  • You can also check the sides of the shoes to see if any glue is discernible. A reputable brand would never allow something like this, but a copy would probably have glue all over it.

10. Michael Kors Handbag

  • For its bags, the brand uses only cream-colored labels containing the primary information about the product: serial number, shade, material, parameters, the price in USD, and a unique bar code.
  • All parts of the original bags are engraved with the brand name. It is applied to magnetic clips, handle rings, clasps, carabiners, and fasteners.
  • The brand’s authentic bags are made from a dense material that does not deform even during shipping when the item is packed.

11. Guess handbags

  • First of all, fake Guess handbags are not made of leather but are cheaper synthetic material. You can check this by pressing the fabric with your finger. If the wrinkles stay there and do not disappear, it is not genuine leather.
  • Next, you need to check the lining of the bag. Original Guess bags have an apparent soft lining, while fake ones sometimes have no lining. And if they do, it is very thin, like a sheet of paper.
  • Finally, you can check the metal of the bag. The metal applications of a genuine Guess bag are sturdy and shiny, with a smooth surface. Counterfeiters, on the other hand, use a cheaper material that may appear dull and even have surface marks.

12. Guess watches

  • Straps for Guess watches are made of metal, silicone, or natural leather. A lousy product smell, uneven color, cracks, scratches, and wear on the strap indicate that we are dealing with an imitation.
  • The back should contain basic information about the watch: a logo with the brand name, the material of the watch body (as a rule, it is steel), and data about the watch mechanism with the engraving Japan Movt (as Guess uses only high-quality Japanese mechanisms).

13. Hermès handbags

  • First, check the inside printing of the leather and see how the letters have been printed. The French accent of the letter E should be very elegant and not chopped up, as in the fakes. Also, the letters F and R in the word “France” appear to be glued together, something that would never happen on a genuine Hermès bag.
  • Next, you can check the leather strap of the bag and inspect the stitching. On a genuine bag, the stitching looks much more elegant and flawless. In contrast, the stitching on the fake bag is not as elegant and, in some areas, looks thicker than that of the original bag.

14. Lacoste polo

  • The Lacoste crocodile is always made with clearly defined details. Its eyes, teeth, legs, and red mouth are clearly visible. The crocodile’s body is bright green, and the tail runs parallel to the back.
  • At the base of the polo neck, there is a white label with the logo and a red number indicating the size. In men’s models, it is one number, while in women’s models, it is two.
  • An imitation Lacoste polo shirt can be spotted because of a small detail: its buttons. Original Lacoste garments have mother-of-pearl buttons with two holes. They have no inscriptions. Replica manufacturers often forget that, so they use buttons with four holes.
  • In the men’s models, at the bottom, on the sides of the polo shirt, there are small openings approximately 1/2 inches deep. In women’s versions, the manufacturer does not make any cuts.

15. Balenciaga shoes

  • Balenciaga sneakers have a very recognizable protrusion on the heels. This feature is often missing in counterfeits, as their structure is much weaker.
  • Not only that, but the front of the shoe has a much more prominent curve than the originals.
  • Also, if you check the back of the shoe, you will notice that the brand name is not well centered. Also, not all the letters are the same size and height, and some appear more significant than others.

16. Pandora bracelet

  • The color of the original silver bracelet is a bit dull, not very light or bright. In manufacturing, Pandora uses a blackening technique that gives them this unique tone.
  • The new original bracelet keeps its perfect shape and virtually no bending, showing well-defined edges of its striated silver cord.
  • The size of the clasp on the original Pandora bracelets is comparable to that of the charms. On the front of the clasp, you can see the engraving of the brand: the word Pandora with a crown above the letter “o.”
  • There is a brand-specific fastening in the clasp: a clover in the form of a small screw with four heads that serves to fasten the bracelet securely. In addition, the clasp must bear the quality seal of the metal (indicating its purity) with a mark of origin, the initials ALE.
  • Pandora charms have an inscription with the name of the brand and the acronym of the metal they are made of. Since 2011, S means silver, and G is gold. Murano glass charms are free of cracks, broken parts, and air bubbles inside.

17. Levi’s

  • The arched design on the back pockets of Levi’s jeans might be the brand’s most recognizable feature. It is either a simple bow or a diamond-shaped arch in the center of the pocket. This feature is often copied remarkably incorrectly on counterfeit jeans.
  • In addition, the color of the stitching is traditionally orange on original jeans, while many fakes use white thread.
  • The third sign of a fake pair of Levi’s jeans is the red tag on the back pocket. An original pair has “Levi’s” written on the red label, while a fake pair has a plain red tag with the letter “R.”

18. Timberland boots

  • The sole has a caramel color, but if you look at it closely, it seems slightly transparent. The company logo and the brand name are printed on them, and the sole is uniform. The heel part does not protrude, but forms a continuous line.
  • The logo is located on the outside, at the bottom of the boot above the heel. Its print is uniform and well-defined, located strictly vertically.
  • The eyelets on the boots are perfect hexagons, which are ideally rounded on the outside. In men’s models, there are 7, in women’s models, 6.
  • All seams on the boots are made with white thread. If there are several seams close, they are clearly parallel to each other.

19. Nike t-shirts

  • The first thing to examine is the Nike logo. In most cases, it does not have exactly the same proportions as the original. Its angle and inclination may be different.
  • Next, the label inside the T-shirt should be checked for misspellings. The original brand would never misspell words, but counterfeit products may have one or more errors.
  • You will also need to look at the labels inside the shirt, near the bottom. Nike’s usually have two or more labels sewn in, while the fake ones usually have only one.

Have you ever unknowingly bought a counterfeit product? How did you recognize that it was not a genuine brand? Could you tell the difference, or did you have to ask an expert?

Preview photo credit Albo73/ Depositphotos.com

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