Quick Answer
Common types of creative financing include owner financing, wraps, subject-to transactions, assumptions, seller carrybacks, private money, lease options, and installment land contracts. Each has different mechanics, risks, and requirements.
Owner Financing
The seller provides financing to the buyer instead of the buyer obtaining a conventional mortgage. The seller holds a promissory note secured by a deed of trust. See What Is Owner Financing?
Wraparound Mortgage
The seller finances the buyer while the seller existing mortgage remains. The new obligation wraps around the existing debt. See What Is a Wraparound Mortgage?
Subject-To
The buyer takes title subject to existing financing without assuming the loan. The original borrower remains obligated. See the investors section on subject-to transactions.
Loan Assumption
The buyer takes over an existing mortgage through a lender-approved process. See What Is a Loan Assumption?
Seller Carryback
The seller finances a portion of the purchase price while the buyer obtains conventional financing for the balance. See What Is a Seller Carryback?
Private Money
Financing from a private individual or entity rather than a conventional lender. Private money loans may have more flexible terms but typically carry higher rates.
Lease Option
A lease with an option to purchase at a future date. Part of the lease payment may apply toward the purchase price.
Contract for Deed / Installment Land Contract
An executory agreement where the buyer pays over time while the seller may retain legal title until conditions are satisfied. See What Is a Contract for Deed?
Which One Is Best?
That is the wrong question. The right question is: Which structure fits this specific transaction, property, and parties? The answer depends on the seller goals, buyer situation, existing financing, property condition, and legal requirements.