Owner Financing

• Similar to a bank, sellers can finance a home to a buyer for a set period of time. At the end of the financing term, the buyer must purchase the home in full. The buyer and seller create a promissory note, similar to a lease, which outlines the details of the transaction. Promissory notes should include the amount of your monthly payments, the interest rate and the purchase price of the home. Once you begin making payments to the seller on the home, you are considered the owner of the property. However, the seller can usually take back the property if you default on your agreement. The length of time it takes to take back the property varies by state.
  
  

Lease Option

• A lease option gives you the opportunity to create a lease on a property and agree to buy it at a later date. Some lease purchases require a down payment to show the owner that you are serious about making a purchase. Lease option agreements contain the standard details of a lease as if you are a traditional tenant on the home. However, an addendum is usually included that includes the purchase price and terms of the home once you are able to obtain a loan for the home. Lease options commonly last the length of normal lease, which is 12 to 24 months.
  
  

Investor Partner

• If you are buying a home as an investment, you may be able to partner with an investor in your home purchase. Visit a local National Real Estate Investors Association meeting to network with fellow investors. Find an investor with goals similar to your own when networking to determine whether he might be interested becoming an equity partner in the purchase of your home. If you have credit, cash, home improvement experience or other valuable resources, an investor is more likely to partner with you.
  
  

Building Your Credit

• Finding ways to creatively finance your home can take time. While you look, don't neglect your credit score. You can simultaneously build your credit score while seeking alternative methods of financing. The longer you research nontraditional ways to purchase properties, the more opportunities you have to save your cash and reduce your liability with your home investments. Pay your bills on time, keep credit card balances low and clear your report of inaccuracies to ensure your credit score improves significantly over time.