Here's the thing about home-buying numbers - you can Google every single one of them, and you'll get twelve different answers, most of them out of date. That's not the hard part of buying a house.
The hard part is not knowing what the numbers even mean, or which ones matter for your situation. So instead of throwing a spreadsheet at you, here's what each cost is for, and the exact question to ask your lender to get your real number.
The down payment (it doesn't need to be 20%)
The 20% number sticks around because it's the threshold for skipping mortgage insurance - not because it's required to buy a house. Several loan programs go well below that, and a few go all the way to zero for buyers who qualify.
The right number for you depends on the loan program you qualify for - which is exactly what a lender sorts out in that first conversation. Don't let "20%" talk you out of even asking.
Fun fact: when we bought our condo, we didn't put any money down at all.
Okay, but is PMI bad?
Here's how I think about it, using round numbers to illustrate the idea - not a promise of what will happen to you:
Puts 5% down on a $300,000 starter home now. Pays PMI in the meantime. Over the next 5 years, they're paying down their loan and (likely) building some equity as the home appreciates - which is 5 years of progress toward owning a place outright, versus none at all.
Wants to avoid PMI altogether, so they rent for 5 years while saving up 20%. Two things work against them the whole time: they're paying rent instead of building equity, and that same starter home almost certainly costs more by the time they're ready - so the 20% target keeps moving further away too.
Whether either buyer comes out ahead on the monthly payment itself depends on where interest rates land in 5 years, which nobody can predict - but the "wait and save" plan has real costs too, even when it works.
PMI isn't free, but it's also not automatically the worse option. It's a genuine trade-off, not a trap.
What your monthly payment includes
Your mortgage payment is rarely just "the loan." In Wisconsin, property taxes especially can catch people off guard - Dane County runs higher than a lot of surrounding areas.
This is why two houses with the same price tag can end up with noticeably different monthly payments - property taxes vary quite a bit by municipality here, more than people expect.
Watch out for the quick "estimated payment" number you see on listing sites and basic online calculators - some default to showing just principal and interest unless you dig into the advanced settings and add in taxes, insurance, and PMI yourself. That gap can make a house look cheaper per month than it will be.
Closing costs in the Madison area
This is probably the question I get asked most often. Closing costs are separate from your down payment, and they're due at the closing table - so they need to be part of your "how much cash do I need" number, not an afterthought.
Honestly, they're also the thing that gets glossed over the most. Not because anyone's hiding anything - lenders just get focused on the down payment conversation and closing costs can fall through the cracks. Don't assume it'll come up on its own. Ask for it.
- Lender and loan origination fees
- Title insurance and title company fees
- Appraisal
- Prepaid property taxes and homeowners insurance
- Recording fees
It adds up to a real chunk of change - typically a small percentage of the purchase price, though it moves around based on your loan and the specific house. Some of it is negotiable, and in certain situations sellers will cover a portion.
The costs nobody mentions
These are the ones that surprise people a few weeks into the process - small individually, but they add up.
Down payment assistance in the Madison area
Okay, this is the one I get excited about. Some down payment assistance programs are grants - meaning money you don't pay back. I've had buyers get up to $30,000 through these programs. That's not a typo.
Here's the catch: these programs are more complicated than a standard loan, with extra steps and extra paperwork, and not every lender knows them well. Some also come with income limits or credit requirements, so not everyone qualifies for every program - which is exactly why the right lender matters here. Working with someone who genuinely specializes in DPA makes a huge difference - I can connect you with the best in the industry for this, people who do it well and do it often.
And to be fair - these aren't automatically the right move for everyone. Sometimes the terms make sense for your situation, sometimes a different loan option works out better. That's exactly the kind of thing worth walking through with someone who knows both sides, instead of assuming either way.
What credit score do you need
Your credit score affects your interest rate more than whether you qualify at all - and the minimum required shifts by loan type and lender, so any number you find online is a rough guide at best.
If your score isn't where you'd like it, that's a conversation worth having early - not a reason to assume buying is off the table.
Common questions
Do I really need a 20% down payment to buy a house in Madison?
No. Most buyers put down quite a bit less. The 20% figure mainly determines whether you'll pay mortgage insurance, not whether you qualify to buy at all - your lender can tell you what you qualify for.
What are typical closing costs when buying a house in Dane County?
They're a real cost to plan for - covering things like lender fees, title insurance, appraisal, and prepaid taxes and insurance. Ask your lender for a Loan Estimate early to get your actual number instead of a general average.
What credit score do I need to buy a house in Madison, WI?
It depends on the loan type and lender, and it shapes your interest rate more than whether you're eligible at all. If your score isn't where you'd like, that's worth a conversation, not a reason to assume you can't buy.
Okay, so who do you call?
I'm not a lender, so I don't run your numbers - but I work with a handful of local lenders I trust completely, the kind who explain things instead of just quoting rates at you.
Get My Lender RecommendationsOr, if you want to walk into that first call already sounding like you know what you're doing:
See the Full Buyer’s Guide Relocating? See the Moving Guide