There's more than one way to buy a home, too.

What it is

You move in as a renter today, and you also sign a separate agreement that gives you the right to buy the house later at a price you both agree on now. Part of your job during that time is getting mortgage-ready.

Who it fits

People who need 12–36 months to fix credit, finish a bankruptcy, or build up savings — and who want to lock in a home and a price while they do it.

What to watch out for

You usually pay an option fee up front, and it may not come back to you if you never buy. Make sure the agreement says in writing who handles repairs, what happens if you're late, and whether your option survives a missed payment.

What it is

The seller acts as the bank. You get the deed and own the home, and instead of paying a mortgage company, you make monthly payments directly to the seller under a written note.

Who it fits

Self-employed buyers, 1099 earners, and newcomers to the country with real income that a bank's checklist can't see.

What to watch out for

Many owner-financed notes have a balloon date — one day the remaining balance is due in full, so you need a plan to refinance or pay it off by then. Confirm who pays taxes and insurance, and that your payments are recorded properly.

What it is

A form of owner financing where the seller's existing mortgage stays in place and your new payment 'wraps around' it. You pay the seller, and that payment covers their loan plus the rest.

Who it fits

Buyers who want a home sooner at a payment that works, when the underlying loan is at a low rate worth keeping.

What to watch out for

Because someone else's loan is still underneath, you want payments running through a licensed third-party loan servicer so you can verify the lender is being paid every month. Ask about the lender's due-on-sale clause too.