Buying a home can be one of the most exciting—and financially complex—decisions you’ll ever make. Whether you’re a first-time buyer or relocating to the Cowboy State, understanding the full scope of costs involved is essential. Beyond the listing price, there are several layers of expenses that can catch buyers off guard. Let’s break down every dollar so you can budget with confidence and clarity.
Down Payment: What You’ll Need Up Front
Your down payment is typically the largest upfront cost, and it varies based on your loan type:
| Loan Type | Typical Down Payment | Example on $300,000 Home |
| Conventional Loan | 5%–20% | $15,000–$60,000 |
| FHA Loan | 3.5% | $10,500 |
| VA Loan (for veterans) | 0% | $0 |
| USDA Loan (rural areas) | 0% | $0 |
Local Tip: Cheyenne qualifies for USDA loans in many areas, making it possible to buy with zero down if you meet income and location requirements.
Closing Costs: The Hidden Fees That Add Up
Closing costs typically range from 2% to 4% of the home’s purchase price. Here’s what’s included:
- Third Party Fees: ~$2,000-$3,500 These include items such as:
- Appraisal
- Credit Report
- Title insurance
- Settlement/closing fees
- Flood certificate
- Recording
- Lender Fees: ~$1,000-$2,000 These are fees charged by your lender to cover costs such as processing, underwriting, and closing your loan
- Recording & Transfer Fees: $100-300 Paid to city, county, or state offices to record your deed and mortgage documents in public record
- Origination and/or Discount Points: ~1% of loan amount Points are fees that you pay upfront in exchange for a lower interest rate on your loan. These are highly variable and should be selected with the assistance of your loan advisor.
Estimated Total on $300,000 Home: $6,000–$15,000
Prepaid Costs: Insurance, Taxes & Escrow
These are upfront payments for items you’ll continue to pay annually:
- Homeowners Insurance: ~$2,000/year, paid in advance at closing
- Property Taxes: Cheyenne’s average is ~$1,800/year
- Escrow Account Setup: Lenders often require 2–3 months of taxes and insurance to be prepaid
Total Prepaid Estimate: ~$2,500–$3,000
Other Costs: Inspection, Moving & More
Don’t forget these essential (but often overlooked) expenses:
- Home Inspection: Crucial for spotting issues — ~$400–$600
- Radon/Mold Testing: Optional but recommended — ~$100–$200
- Moving Expenses: Varies by distance and service — ~$500–$2,000
- Utility Setup & Deposits: ~$200–$400
Bonus: How to Reduce Out-of-Pocket Costs
Here are smart strategies to ease the financial burden:
- Seller Concessions: Many sellers are willing to negotiate paying a portion, or all of your costs in order to sell their home
- Down Payment Assistance Programs: There are a plethora of options for first time homebuyers, or move up buyers, that will allow you to finance some of your down payment and/or costs
- Gift Funds: Eligible donors (family members, close friends, and employers) can contribute to your down payment or closing costs
- Lender Credits: Utilizing specific programs and strategies can allow you to receive a credit from your lender that can be used to cover costs
Final Thoughts
Buying a home is more than just a mortgage payment—it’s a mosaic of costs that deserve attention. By understanding each component, you’ll be better prepared to make informed decisions and avoid surprises. Whether you’re drawn by Cheyenne’s small-town charm or its proximity to nature, your dream home is within reach—with the right financial roadmap. Ready to start your journey? Call us today at 307.393.0107 to get expert guidance, personalized options, and the fast track to your closing!