Seller financing Closing costs vs conventional

[Christian I Presant]

Does anyone have any experience on the difference with closing costs between using seller financing vs conventional loan from the bank? 

How much cheaper are closing costs through seller financing?

[Jason Wray]

Seller financing is different with each seller so its hard to gauge your scenario. The seller can charge any rate and down payment since they are no regulations. You also have no legal recourse other than small court with a seller. Banks have to adhere to regulations and laws that protect the buyer not the seller. Going conventional is a safer way to get the mortgage and avoid legal issues if anything happens.

When you use a bank you only pay the processing and underwriting/Hard fee's but not points. When you use a "broker" or lender you will pay points through broker fee or LO comp plan. The seller can hit you with whatever they want within reason but can hide it in a number of ways. What is the rate, Are you going to have a prepayment penalty, what’s the down payment and total closing costs from the seller?

Also are you getting an appraisal and is it from the seller or did you select one from an AMC company? All things ordered and protected by the bank- Appraisal, Fee's, and No prepays.