If you’re a veteran in Madison, Wisconsin, considering a VA home loan, it’s essential to understand VA loan closing costs in Madison, Wisconsin before making your purchase. While VA loans offer zero down payment and lower interest rates, there are still some out-of-pocket expenses you’ll need to budget for.
We spoke with Mike Schroeder, a Senior VA Loan Specialist in Madison with Guaranteed Rate, to break down what local veterans can expect, how to reduce their closing costs, and how to take advantage of local financial assistance programs.
What Are VA Loan Closing Costs?
VA loan closing costs typically range from 2% to 5% of the home’s purchase price. These expenses include:
📌 VA Funding Fee: Required for most VA loans, unless you qualify for an exemption due to a service-connected disability. The fee is 2.3% for first-time users with no down payment, or 1.65% with a 5%+ down payment.
📌 Appraisal Fee: In Wisconsin, VA loan appraisals range from $575 to $825, depending on the property’s location.
📌 Title Insurance & Recording Fees: These protect both you and the lender and are required for closing.
📌 Loan Origination Fees: Lenders may charge an origination fee up to 1% of the loan amount.
📌 Prepaid Taxes & Homeowners Insurance: Depending on the time of year, Madison-area veterans may need to prepay property taxes and insurance at closing.
How Madison Veterans Can Reduce VA Loan Closing Costs
Many veterans in Madison and Dane County can lower their closing costs by using the following strategies:
1. Seller Concessions
🛑 Did you know? The VA allows sellers to pay up to 4% of the loan amount toward the buyer’s closing costs and prepaid expenses.
📢 Mike Schroeder’s Advice:
“In Madison’s competitive housing market, negotiating seller concessions can save veterans thousands at closing. It’s a great strategy to reduce out-of-pocket expenses.”
2. Local Assistance Programs for Veterans
🏡 City of Madison Home-Buying Assistance: Low-income homebuyers, including veterans, may qualify for down payment and closing cost grants.
🔹 Wisconsin Housing and Economic Development Authority (WHEDA): Offers closing cost assistance loans to eligible homebuyers in Wisconsin, including veterans.
3. Request a VA Loan Closing Cost Exemption
📌 Veterans with a service-connected disability of 10% or more may qualify for a VA funding fee waiver, saving thousands in upfront costs.
Are You Ready to Buy a Home in Madison with a VA Loan?
Connect with Mike Schroeder from Guaranteed Rate at 608-443-6918 or e-mail mike.schroeder@rate.com
Understanding VA loan closing costs in Madison, Wisconsin is crucial when preparing for homeownership as a veteran. With the right local resources, seller concessions, and VA benefits, you can significantly reduce your out-of-pocket expenses.
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