This post provides information and resources as a starting point and should not be construed as professional financial advice.
Planning Your First Home Purchase
Buying your first home in the Madison WI area is exciting — but it also involves planning and preparation. Understanding your budget, exploring financing options, deciding what you want in a home and community, and learning about local market conditions are all key steps. It’s also smart to assemble your team of professionals early in the process.
Get Professional Financial Advice
Objective financial advice is invaluable for first-time buyers. You’ll want to buy your first home when you are ready to comfortably take on the responsibilities of home ownership. It should also align with your other long-term financial goals, like retirement planning, repaying a student loan, or saving for college.
Some employers offer financial planning services, and some free home buyer educational resources are listed below. You could also search for fee-only Certified Financial Planners in Madison, WI, or for CFPs offering virtual services.
1. Budget
Start by gaining a clear understanding of your financial situation.
- Know your current income and expenses. Budgeting apps like Rocket Money can help track and manage your spending.
- Estimate your future income. Consider your career trajectory and earning potential.
- Evaluate your savings. Identify how much you can comfortably use for a down payment.
- Understand your debt levels. Your Debt-to-Income Ratio (DTI) is an important factor lenders consider.
- Determine a comfortable monthly housing budget. Free resources in Madison include:
- Homebuyer Education Classes from the Housing Round Table
- Become a Homeowner Webinar from the City of Madison Community Development Agency
- Account for maintenance and repairs. In addition to your fixed costs (mortgage, taxes, insurance, HOA fees), plan for ongoing upkeep. See this Redfin Blog Post for guidance.
2. Financing Options
Once you know your target monthly budget, explore financing options. The type of mortgage you choose will influence how much you can spend — and your long-term financial picture.
- Many conventional and low down payment programs are available, particularly for first-time buyers.
- Compare lenders and seek advice from both loan officers and independent financial advisors.
- Know the difference between “pre-qualification” and “pre-approval”.
- Pre-qualification is an informal assessment of your financial situation and ability to buy a home. Best when you are early in the planning process.
- Pre-approval is a more formal and documented assessment of your ability to buy a home with detailed terms. Pre-approval letters are best when you are ready to buy and are actively in the home search process.
- Learn more about the differences on this UW Credit Union page.
- Because financing is such a complex topic, we’ve dedicated an entire post to it — Mortgage Options for Madison Area Home Buyers.
3. Deciding What You Want in a Home and Community
First-time buyers often face a big question: should you wait for your “forever” home or buy a “starter” home now? It’s often recommended to plan on staying in your first home at least five years (see this post from Rocket Mortgage).
- Lifestyle fit. Do you value walkability and nearby amenities, or do you prefer more space and privacy?
- Try before you buy. Spend a few nights in a short-term rental in the area to get a feel for the neighborhood.
- Know what can and can’t be changed. Lot size and school district may be fixed, but adding living space or finishing a basement might be possible.
4. Learn About Local Market Conditions
Understanding the market helps you set realistic expectations.
- Set up saved searches on your preferred real estate site to track new listings and price changes.
- Review our Home Search Tips page for insights on popular search platforms.
- Explore local data. Visit our Interactive Map page for average prices by city or neighborhood in Dane County.
5. Assemble Your Team
Surround yourself with professionals who can guide you through each step of the homebuying process.
- Buyer’s Agent (Realtor)
- Mortgage Consultant (Loan Officer)
- Personal Financial Advisor or Certified Financial Planner (CFP)
- Home Inspector and other specialists, depending on the property
Download the Home Buyer Checklist (Free PDF)
Buying a home is a big milestone — and preparation can make all the difference. Download our free checklist (PDF) to stay organized as you plan your home purchase and explore your mortgage options.
Additional Resources
- Rocket Mortgage: 15 First-Time Home Buyer Tips
- Navy Federal Credit Union: Step-by_Step Guide to Buying Your First Home
- Freddie Mac: 8 Steps to Buying a Home
Have questions?
We’re happy to help — contact us to discuss your plans and next steps.