Homebuyer Homebuying

Why Buying a House Without a Realtor Is a Bad Idea

Buying a house is one of the most significant financial decisions you will make in your lifetime. While it can be tempting to go it alone and purchase a home without the assistance of a real estate agent, doing so can come with significant risks and drawbacks. This blog post will explore why buying a house without a realtor is a bad idea. 


Why Do People Buy a House Without a Realtor?

While working with a real estate agent when buying a home is generally recommended, some people may purchase one without one. There are several reasons why someone might make this decision.

One reason people may buy a home without a realtor is the desire for more control over the process. When working with a real estate agent, the buyer may feel they have less say in important decisions, such as which properties to view or how much to offer. Buyers can have more direct input by purchasing a home without an agent.

Additionally, some buyers may simply prefer to handle things on their own. They may feel confident navigating the home-buying process and want to take on the challenge themselves. However, it is essential to note that buying a home without a realtor can be risky and may not be the best choice for everyone.

There are also rare instances when buyers must pay for the use of a real estate agent when purchasing a For Sale By Owner (FSBO) house. Contrary to popular belief, however, these instances are few and far between, as the seller almost always pays the real estate agent’s commission fee instead of the buyer. 


5 Times When it May Be an Advantage Buying a House Without a Realtor

Although most people rely on a buyer’s agent for a home purchase–about 88%, according to a 2020 survey by the National Association of Realtors (NAR)–here are five scenarios in which buying a house without an agent might be preferable.

1. You’re Related to the Seller

If you are selling a home within your family, you might be able to avoid hiring a real estate agent. In that case–as long as you have agreed on a price and other key details of the transaction–you likely could handle it without the seller paying several thousand dollars in commission. Consider consulting a lawyer to conduct a title search on the home and ensure all the paperwork is filled out, reviewed, and filed correctly.

2. You Know the Area

When buying a house in an area you’re intimately familiar with, you might not believe it’s worth hiring a buyer’s agent. However, there are more many services a real estate agent can provide than just “knowing the market,” such as helping you find the home and negotiating with the seller’s agent.

3. You Can Save Money

There are RARE cases in which a buyer might have to pay all or part of a buyer’s agent’s commission. For example, if it is a For Sale By Owner, they might clarify that they will not negotiate fees with a buyer’s agent. In this case, you might decide it’s worth working directly with the person selling the home instead of hiring an agent.

4. You Get to Work Alone

You might not trust dealing with a buyer’s agent, even though they are legally required to represent your interests. If you feel like an agent would push you toward a deal too quickly or set you up with the wrong home, you might feel more comfortable taking it on yourself.

You’ll want to be careful not to be overmatched when dealing with the seller’s agent, who only represents the seller’s interests. Think of it like negotiating a divorce settlement with just the counsel and expertise of the other party’s lawyer—it might not go well for you.

5. You’re Buying a New Home

If you are focused only on buying a newly built home, you likely could work out the arrangement directly with the builder. According to the NAR survey, about 6% of buyers worked with a builder or builder’s agent to purchase a home in 2020.


Disadvantages of Buying a House Without a Realtor

While there are some potential advantages to buying a House without a realtor, there are also several significant drawbacks. One of the biggest is the buyer’s lack of real estate expertise that an experienced real estate agent can provide. Agents have extensive knowledge of the local market, the home-buying process, and the legal and financial aspects of buying a home. Without an agent, the buyer may be disadvantaged when making informed decisions and avoiding potential risks.

Another potential disadvantage of buying a house without a realtor is the potential for legal and financial complications. Real estate transactions can be complex, with numerous forms, contracts, and legal requirements that must be met. Without an agent to guide them through the process, the buyer may risk making mistakes or overlooking important details that could lead to legal or financial issues.

Finally, buyers who choose not to work with a realtor may miss out on valuable connections and resources that agents can provide. For example, agents may have access to off-market properties or be able to connect buyers with local lenders, inspectors, and other professionals who can help facilitate the home-buying process. By not working with an agent, the buyer may be limiting their options and potentially missing out on valuable opportunities.


Will Buying a House Without a Realtor Save You Money?

One of the most common reasons people buy a house without a realtor is the belief that it will save them money. While it is true that working without an agent can eliminate some costs, it is essential to understand the full financial implications of this decision.

However, it is crucial to consider the potential costs of not working with an agent. Without an agent, the buyer may be less likely to negotiate a favorable purchase price, potentially resulting in a higher overall cost. Additionally, the buyer will still to pay for various services and inspections, such as a home inspection or title search.

Overall, whether buying a house without a realtor will save you money depends on several factors, including the purchase price of the home, the local market conditions, and the specific services required. It is essential to carefully weigh the potential costs and benefits before deciding. According to NAR, 86% of buyers recently purchased their homes through a real estate agent, and 10% purchased directly from the owner


If You Were to Move Forward in Buying a House Without a Realtor, Here’s What’s Involved

Buying a home without a realtor can be complex, but it is possible to do it successfully with the proper preparation and resources. Here are the general steps involved in buying a home without a realtor:

Determine Your Budget and Financing Options

Before you begin looking at properties, knowing how much you can afford and what financing options are available to you is essential.

Search for Properties

There are several ways to find homes for sale without a realtor, including online listings, local classifieds, and driving through neighborhoods.

View Properties

Once you have identified potential properties, you must arrange to view them in person. You may be able to contact the seller directly to schedule a viewing.

Make an Offer

If you are interested in a property, you must make an offer to the seller. This offer should include the purchase price, any contingencies or conditions, and a proposed timeline for completing the transaction.

Negotiate and Finalize the Sale

The seller may accept your offer, reject it, or counter with a different offer. If you reach an agreement, you must finalize the sale by completing any necessary paperwork, arranging for financing, and transferring the title.

Complete Necessary Inspections and Paperwork

It is highly recommended that you complete various inspections and paperwork to ensure the property is in good condition and that all legal requirements are met.

Close the Transaction

Finally, you must complete the transaction by paying the purchase price, transferring the title, and arranging any necessary funds or document transfers.


It is important to note that buying a house without a realtor can be challenging, and it may be in your best interest to seek the guidance of a real estate attorney or another professional.


Bottom Line

While buying a house without a realtor is possible, it is essential to consider the potential advantages and disadvantages of doing so. Some benefits of buying a house without a realtor include negotiating directly with the seller and moving more quickly through the process. However, there are also several potential drawbacks, including the lack of experience and resources that a real estate agent can provide.

Working with a real estate professional when buying a house is highly recommended. An experienced agent can provide valuable guidance and support throughout the process, helping you to avoid potential pitfalls and make informed decisions. By working with a real estate agent, you can also benefit from their extensive knowledge of the local market, connections with other professionals, and access to off-market properties.

Ultimately, deciding whether to buy a house with or without a realtor is personal and will depend on your circumstances and preferences. However, if you choose to work without an agent, being well-informed and prepared for potential risks and challenges is crucial.


Buying a House? Let Ahmad Azizi of Option Funding, Inc. Do Your Loan

If you are in the market to buy a house, consider working with me, Ahmad Azizi of Option Funding, Inc. As a local mortgage broker with years of experience in the industry, I’ve built strong relationships with many banks, which allows me to close even the most challenging home deals for my clients.

When you work with me, you can expect personalized guidance and support throughout the homebuying process. I will work with you to determine your budget and financing options and list potential properties that meet your needs and preferences.

One of the most significant benefits of working with me is my extensive knowledge of the local market and the mortgage process. I can provide valuable insight into your loan options.

If you have any questions, please contact me directly through Option Funding, Inc. – I’ll happily answer any questions and provide more information about my services and experience.

Homebuying Loan Officer

Using a VA Loan For a Second Home

VA loans are a valuable tool for many veterans and active-duty service members looking to buy a home. However, many people are unaware that VA loans can also be used for a second home purchase. In this blog post, we will explore the requirements for using a VA loan for a second home and answer frequently asked questions about this topic. If you’re a veteran or active-duty service member considering buying a second home, keep reading to learn more.


Questions we’ll address in this post:

  • Can you use a VA loan for a second home?
  • Can I use a VA loan to buy a vacation home?
  • Can I use a VA loan for an investment property?
  • How does the VA bonus entitlement work?
  • What is the difference between full vs. remaining entitlement?
  • What is an example of a bonus entitlement?
  • How can one best understand loan limits?
  • How many times can I use a VA loan?
  • How can I restore my eligibility after I sell my home?
  • What do I need to know if someone assumes my VA loan?


Now, let’s dive into the details and answer these questions individually.


Can You Use a VA Loan for a Second Home?

If you’re a veteran or active-duty service member looking to buy a second home, you may wonder if you can use a VA loan for a second home. The answer is yes, but there are some conditions you must meet:


To use a VA loan for a second home purchase, you must first satisfy your initial VA loan requirements, which means you must have served at least 90 consecutive days on active duty during wartime, or 181 days during peacetime, or served for at least six years in the National Guard or Reserves. You must also have a certificate of eligibility (COE) from the VA.


In addition to these requirements, you must meet other conditions to use a VA loan for a second home. The property must be in the United States and be used as a residence for at least a portion of the year. The VA does not specify that the property must be a primary residence, so it can be a vacation home or a rental property if you occupy it for some portion of the year.


Remember that the VA loan amount may be limited for a second home purchase, and you may need to make a down payment to cover the difference between the loan amount and the purchase price. However, a VA loan for a second home can still be an excellent option for many veterans and active-duty service members.


The following section will explore whether you can use a VA loan for vacation homes or investment properties.


VA Loans for Vacation Homes and Investment Properties

While VA loans are primarily intended for purchasing a primary residence, there are some circumstances in which they can be used to buy other types of properties, such as vacation homes or investment properties. However, there are some additional requirements and limitations to keep in mind.


To use a VA loan for a vacation home, the property must still meet the exact occupancy requirements as a second home. You must use the property for at least some portion of the year as a personal residence. The property must be in the United States and be a single-unit property.


Using a VA loan for an investment property is more complicated. The VA does not allow VA loans for purely investment purposes, meaning the property must be primarily used as a personal residence. Additionally, you can only use a VA loan to purchase a property with up to four units, and you cannot use a VA loan to purchase a property with more than one acre of land. If the property has more than one unit, you must occupy one of the units as your primary residence.


While using a VA loan for a vacation home or investment property can be an attractive option for some veterans and active-duty service members, there are some limitations and potential drawbacks to keep in mind. The loan amount may be limited, and you may need to make a down payment to cover the difference between the loan amount and the purchase price. Additionally, if you use the property as a rental, you will be subject to the VA’s rental income requirements.


In the next section, we’ll explore how the VA bonus entitlement works and how it can affect your ability to use a VA loan for a second home purchase.


Understanding VA Bonus Entitlement and Loan Limits

When you use a VA loan to purchase a home, you are given a certain amount of entitlement – the maximum amount the VA will guarantee on your loan. If you have used your VA loan entitlement before, you may still be able to use a VA loan for a second home purchase using your remaining entitlement or bonus entitlement.


The full entitlement is the amount of entitlement the VA guarantees for every eligible veteran. As of December 2022, eligible veterans, service members, and survivors with full entitlement no longer have limits on loans over $144,000, meaning no down payment is necessary. The VA will guarantee your lender that if you default on a loan over $144,000, the VA will guarantee up to 25% of the loan amount for a borrower with full entitlement. One qualifies for full entitlement if they meet at least one of the following requirements:

  • You’ve never used your home loan benefit, or
  • You’ve paid a previous VA loan in full and sold the property (in this case, you’d have your full entitlement restored), or
  • You’ve used your home loan benefit but had a foreclosure or compromise claim (also called a short sale) and repaid us in full.


You may have the remaining entitlement if you have used your VA loan entitlement before, meaning that you can use your remaining entitlement to purchase a second home as long as the total amount of the VA loan is within the remaining entitlement amount.


You may also have bonus entitlement, an additional entitlement that the VA provides to borrowers who meet specific requirements, such as purchasing a home in a high-cost area. Bonus entitlement can sometimes be used to purchase a second home, but the loan amount cannot exceed the bonus entitlement.


For example, let’s say you used your full entitlement to purchase your first home, which you later sold. You now have a remaining entitlement of $68,250. If you want to use a VA loan to purchase a second home for $300,000, you could use your remaining entitlement of $68,250 and your bonus entitlement of $89,062 to cover the guarantee on loan.


It’s important to note that VA loan limits vary by location and are based on the conforming loan limit set by Fannie Mae and Freddie Mac. In most areas, the VA loan limit for 2023 is $726,200. However, in high-cost areas, the loan limit can be much higher.


If you use a VA loan to purchase a second home, the loan amount may be limited by the remaining entitlement, the bonus entitlement, or the loan limit for your area. Sometimes, you may need to make a down payment to cover the difference between the loan amount and the purchase price.

In the next section, we’ll explore how many times you can use a VA loan and how to restore your eligibility after selling your home.


Using VA Loans Multiple Times and Restoring Eligibility

If you’re a veteran or active-duty service member, you may wonder how many times you can use a VA loan to purchase a home. You can use a VA loan as often as you want if you meet the eligibility requirements and have remaining entitlement.


To restore your eligibility for a VA loan after selling your home or paying off a VA loan, you must apply for restoration of entitlement. To do this, you will need to submit a completed VA Form 26-1880, along with proof of the sale of your home or the payoff of your VA loan. You will also need to provide proof of your current military status, such as a statement of service or discharge papers.


Restoring eligibility can take some time, so starting the process early is essential if you intend to use a VA loan for a second home purchase. Additionally, keep in mind that you will need to satisfy the exact requirements as you did for your initial VA loan, including having served the minimum length of time and obtaining a certificate of eligibility.


It’s important to note that if you default on a VA loan, you may lose your entitlement and be unable to restore it. Additionally, if you have a VA loan in default, you may only be able to use your remaining entitlement for a second home purchase once the default is resolved.


What to Know if Someone Assumes Your VA Loan

If you have a VA loan and you’re considering selling your home, you may have the option to allow the buyer to assume your VA loan. Here’s what you need to know about VA loan assumptions:


A loan assumption is when a buyer takes over the payments on an existing mortgage instead of obtaining a new mortgage to purchase the property. In the case of a VA loan, the buyer must also be a veteran or active-duty service member and meet specific eligibility requirements.


To qualify for a VA loan assumption, the buyer must have a good credit score and sufficient income to make the payments on the loan. The buyer must also obtain a certificate of eligibility from the VA and meet other underwriting requirements.


One advantage of a VA loan assumption is that it can save the buyer money on closing costs and may provide a lower interest rate than a new mortgage. However, the buyer will be assuming the remaining term and balance of the original loan, which may only be ideal if the buyer plans to keep the property for a short time. Additionally, the seller will still be liable for the loan if the buyer defaults.


Before agreeing to a loan assumption, it’s essential to consider the pros and cons carefully and to work with a qualified mortgage professional who can help you make an informed decision.


Apply for a VA Loan Today at Option Funding Inc.

In this blog post, we’ve explored the use of VA loans for second homes, vacation homes, and investment properties and the requirements and limitations of each. We’ve also discussed how the VA bonus entitlement and loan limits work, how to restore eligibility for a VA loan, and what to consider if someone assumes your VA loan.

If you’re a veteran or active-duty service member considering purchasing a second home, a VA loan can be a valuable tool to help you achieve your goals. Contact me, Ahmad Azizi of Option Funding Inc., if you have any further questions or are ready to apply for a VA loan for a second home purchase.

Homebuying Mortgage

Co-Signing a Mortgage for Your Child: What You Need to Know

As a parent, one of the most rewarding experiences is helping your child achieve their goals, especially when it comes to buying their first home. However, the process of buying a home can be daunting, especially for first-time buyers. As a parent, you can play a crucial role in helping your child buy a home by co-signing a mortgage for your child, navigating them through the home buying process, and making informed decisions.


Co-Signing a Mortgage for Your Child? Consider this:

As a parent, you may be considering the idea of co-signing a mortgage for your child. This can be a great way to help them achieve the milestone of homeownership and provide them with a stable place to live. However, it is important to carefully consider the financial and legal implications of buying a home for your child before deciding.

Financially, helping your child buy a home may seem like a good investment. However, it’s important to keep in mind that owning a home comes with ongoing expenses such as mortgage payments, property taxes, and maintenance costs. Additionally, if your child is not able to make these payments, the financial burden may fall on you.

From a legal standpoint, co signing a mortgage for your child can have implications for estate planning and taxes. If you plan to transfer ownership of the home to your child in the future, it’s important to consult with a lawyer to understand the tax implications and ensure that it aligns with your overall estate plan.

On the other hand, if you are financially stable and willing to take on the responsibilities, helping your child buy a home can be an excellent way to provide for them and support their dream of homeownership. However, it’s important to have clear communication and agreement on the terms, such as who is responsible for the payments, who will live in the house, and when the ownership will be transferred.

It’s important to consider both the pros and cons before deciding about buying a home for your child, and to seek the advice of financial and legal professionals. With proper planning and guidance, co signing a mortgage for your child can be a positive step towards achieving their goal of homeownership and to secure their future.



  • Can be a good investment for the future, as property values tend to appreciate over time
  • Can help your child establish credit and build wealth
  • Can provide financial assistance and support for your child, especially if they are just starting out in their career or are facing financial difficulties
  • Can be a way to help your child achieve the milestone of homeownership at a young age
  • Provides them with a stable and permanent place to live
  • Can be a way to keep your child close to family and loved ones
  • Can be a way to diversify your portfolio and invest in a tangible asset
  • Can be a way to provide a sense of security for your child, as homeownership is a sign of stability and permanence



  • It may create expectation of financial support in future, or create resentment if the child does not have the means to support the home
  • Legal and tax implications may arise, especially when transferring ownership of the property to your child
  • Ongoing expenses such as mortgage payments, property taxes, and maintenance costs
  • The process can be complex and may require legal and financial expertise
  • It may create a sense of dependency for the child, and not allow them to learn the responsibilities of homeownership.


Considerations for Parents Before Helping Your Child Buy a Home

When helping your child buy a home, there are several factors that parents should consider before deciding.

Financial Readiness

It’s important to determine if your child is financially ready to take on the responsibility of a mortgage. This includes having a stable income, a good credit score, and enough savings for a down payment and closing costs.


Relationship Dynamics

Buying a home together can have a significant impact on your relationship with your child. It’s important to discuss expectations, responsibilities, and plans for the future before making a decision.


Legal and Tax Implications

There may be legal and tax implications when transferring ownership of the property to your child. It’s important to consult with a lawyer and a tax professional to understand the implications and to ensure that the process is handled correctly.


Future Plans

It’s important to consider your child’s future and how the home may fit into those plans. For example, if your child plans to move away soon, buying a home may not be the best option.


Emotional Readiness

It’s important to consider if your child is emotionally ready to take on the responsibilities of homeownership, and to ensure they understand the responsibilities that come with owning a home



It’s important to understand the extent of your support, and to ensure that your child understands that homeownership comes with responsibilities and costs, and that you can’t be expected to pay for everything all the time.


Ultimately, helping your child buy a home can be a great way to provide them with a stable and permanent place to live, and to help them achieve the milestone of homeownership at a young age. 


5 Home Buying Assistance Options

When helping your child buy a home, there are several options parents should consider to assist their child in the home buying process.

Co-signing on a Mortgage

This option allows parents to co-sign on the mortgage and assist with the down payment, but the child is still responsible for the monthly mortgage payments.


Providing a Gift or Loan for a Down Payment

This option allows parents to provide financial assistance for the down payment, but the child is still responsible for the monthly mortgage payments.


Rent-to-Own Agreement

This option allows the child to rent the home for a certain period, with the option to purchase the home at the end of the rental period. This can be a good option for those who need time to improve their credit score or save for a down payment.


Buying the Home and Renting it to the Child

This option allows the parents to purchase the home and rent it to the child. This can be a good option for parents who want to provide a stable place for their child to live but don’t want them to take on the full responsibility of homeownership.



This option allows parents and the child to jointly invest in the property, with both parties sharing the responsibilities and benefits of owning the home.


Consider Helping Your Child Buy a Home with Ahmad Azizi of Option Funding

Helping your child buy a home can be a rewarding experience for both parents and children. However, it’s important to consider the financial and emotional implications before deciding. As a parent, it can be helpful to explore different assistance options such as co-signing on a mortgage, providing a gift or loan for a down payment, rent-to-own agreement, buying the home and renting it to the child or co-investing. It’s also important to seek the advice of financial and legal professionals before deciding.

At Option Funding Inc, we understand that buying a home is a big decision and we are here to help parents navigate the process. I, Ahmad Azizi, can help you understand the different options available and guide you through the process of buying a home with your child. From finding the right property to securing the best financing options, we have the expertise and resources to make the process as smooth and stress-free as possible. Contact us today to learn more about how we can help you and your child achieve the dream of homeownership!

Homebuying Mortgage

Shopping for Mortgages in the New Year

The housing market changes so quickly, from one season to the next. For the majority of last year, most communities around the country found that sellers had the upper hand in real estate transactions. Multiple homebuyers were trying to buy up property – increasing offers and making concessions at every turn. Some even went way above the asking price (and market value) just to have a chance to purchase their future home.

Today, the tides are turning ever so slowly. More and more buyers are finding that they have a bit more control – or at least have a more level playing field – as they move forward with finding the house of their dreams. Of course, before they can proceed to make an offer, they need to be pre-approved for a mortgage.

So, what is it like shopping for mortgages in the new year? Let’s take a look at the current trends and the different options available.

Current Trends for the New Year

Believe it or not, shopping for mortgages in January is a fantastic time for buying a new home. It comes with competitive pricing and discounted rates when compared to other seasons – especially summer and fall.

Why is this? Well, there is no definitive answer. The reason likely has to do with the fact that the competition is nowhere near as fierce in the winter months as it is during the warmer months.

Does that mean you should only apply for one mortgage? Does that mean you should just grab the first mortgage that you get approved for? Not at all. Just because the volume of buyers is down doesn’t mean that the offers from mortgage companies aren’t still competing for your business.

Although interest rates may fluctuate for 2023, January is proving to be a very good time to invest in a mortgage as we move through the year. Most tend to agree on the fact that continued inflation, the looming idea of a possible recession, and high-interest rates are all going to make an impact on homebuyers.

Different Types of Mortgages

If you are interested in buying a new home this year, now is the time to get shopping for mortgages. And understanding the different types of home loans available can help you to secure something that is a great fit for your needs.

  • Fixed-Rate Mortgages: Fixed-rate mortgages are the most well-known type of loan. You pay a monthly payment that includes principal and interest – and it never changes throughout the loan’s term. You can often find these for terms ranging from 10 years to 30 years.
  • Adjustable Rate Mortgages (ARM): ARM loans have an interest rate that varies throughout the term of the loan. It may or may not start out as fixed, but then it will fluctuate due to market conditions.
  • Interest-Only Mortgages: Mortgages that are interest-only focus on repaying the interest first for a specific amount of time before moving on to paying toward the principal. While this can start you off with small payments, the downside is that the longer you pay interest only, the bigger your monthly payments will be in the future.
  • Graduated Payment Mortgages: With this type of mortgage, graduated payments increase each year for a certain number of years before becoming fixed. This is commonly used for buyers looking to qualify for a loan when the interest rates are high.
  • Government-Backed Loans: Government-backed loans, such as FHA home loans and VA loans, all help you to get the mortgage you are looking for, but often with less-strict requirements.
  • FHA home loans: Backed by the Federal Housing Administration and allow more people to become homeowners. They often have low mortgage rates and require a minimum down payment.
  • VA loans: For military veterans, giving them low-interest rates, reduced closing costs, no down payment, and more. These are great perks for veterans and their families to take advantage of.
  • Jumbo LoansLenders of conventional mortgages will not often finance properties that are too high. For those looking to purchase a new home that exceeds the maximum amount, jumbo loans are often the best choice. Depending on the lender you choose, you could find a loan that is fixed rate or adjustable.

Tips For Securing a Great Mortgage

  • Boost your credit score. You will find that it is possible to get a mortgage even when you have a credit score below 650. But, if you could take steps to boost your credit by even 100 points to between 700 -749, you will see tremendous savings on your mortgage rate.
  • Choose the right size mortgage. As of 2023, the Federal Housing Finance Agency (FHFA) announced new conforming loan limits, raising them by 12% (an increase of $79,000 from 2022). This change could lead to savings for borrowers!
    • Any mortgage under $726,000 in most areas will get you a lower rate. However, in high-cost areas such as Los Angeles, Orange, and Alameda, rates are higher at $1,089,300. Elsewhere, you’ll find rates for Ventura county at $948,750, San Diego county at $977,500, and Riverside county at $726,200.
    • Keep in mind each loan comes with the costs of loan origination, regardless of the size of the loan. The larger the loan, the greater the return. So, to cover the costs, it is common to find rates a bit higher for lower loans.
  • Decrease your LTV and DTI. People spend a lot of time focused on their debt-to-income ratio (DTI). And while it is important, decreasing your loan-to-value (LTV) rate will often help both. Get the best rate when you can keep your LTV below 80% and a DTI below 30%.

The Wrap Up

If buying a new home is on your 2023 bucket list, then you may not want to delay. As we mentioned, the competition is lower during the winter months. And, with predictions of fluctuating interest rates as we make our way through the year, you may not get a better opportunity than you have right now.

Shop for Mortgages at Option Funding, Inc.

Make shopping for mortgages easy.

Visit Ahmad Azizi at Option Funding, Inc. in Westlake Village to find the best home loan and mortgage options today!

Homebuyer Homebuying Mortgage Unconventional Mortgage

Bad Credit, Lower Income? Try an Unconventional Mortgage

It’s so easy to get discouraged about buying a new home when you have bad credit or not enough income. You see other people buying houses all the time and wonder “how do they do it?” Do not fall into the trap of thinking that everyone has a perfect credit score or a well-paying job, because that is simply not the case.

Those with less-than-ideal circumstances for a conventional loan should know that there are other options available, such as an unconventional mortgage. It all comes down to knowing where to turn and who to turn to. This can mean the difference between being a homeowner or not.

Ready to get your dream home in the new year? Option Funding, Inc. can help make it a reality with an unconventional mortgage.

What is an Unconventional Mortgage?

Conventional loans are the most well-known type of home mortgage for homebuyers. These loans come with requirements that must be met to be approved, such as having the proper credit score, enough money for a down payment, and proof of steady employment.

These loans can either be a fixed rate, meaning they won’t change over time, or an adjustable rate, which means they come with an interest rate that changes at predetermined times, such as once a year. The rate can go up or down depending on economic factors. There are not many other options for these types of mortgages which is what makes it tough for everyone to buy a home.

Unconventional mortgages are different. These loans potentially allow people to purchase a new home due to their less stringent approval requirements. Those with lower credit scores and less income may be able to obtain an unconventional mortgage. It is important to keep in mind that some of these loans may require a larger down payment.

Types of Unconventional Mortgages

Unconventional mortgages are backed by government programs, including FHA, USDA, and VA loans. Let’s take a closer look.

FHA loans are those secured by the Federal Housing Administration. This is, by far, the most used unconventional loan and has a lower credit score and down payment requirement than most conventional loans. It is a mortgage that is insured by the FHA and issued by a bank or other approved lender.

USDA loans are secured by the U.S. Department of Agriculture. These are used to help build rural areas. There are a few restrictions when it comes to credit score, the size of the town, and it must be the primary residence of the borrower.

VA loans allow active-duty service members, veterans, and eligible surviving spouses to finance a home with no down payment, no mortgage insurance and lenient credit requirements. They are backed by the U.S. Department of Veterans Affairs.

While these may be the most popular types of unconventional mortgages, they aren’t the only options. Non-QM, stated income loans, private money mortgages, hard money lenders, and seller financing all fall into the category of unconventional mortgages.

Some Advantages of an Unconventional Mortgage:

Less stringent requirements. Not everyone fits the mold for a traditional mortgage. So having options means that everyone gets a chance at owning a home, including those who have been rejected for a conventional loan. This includes those who are self-employed, someone that may have an unstable employment history or doesn’t have a lot of savings, those with bad credit, have previously filed for bankruptcy, and so on.

Greater equity upfront. Another thing that sets unconventional mortgages apart is the fact that depending on the type of loan, they may require you to have a larger down payment. And while this may seem like a disadvantage, it really isn’t. By doing this, you are lowering your monthly mortgage payment and creating equity in your home before you even move in.

Greater flexibility. There is not much flexibility to be had when it comes to traditional mortgages, aside from choosing whether you want a 15 or a 30-year fixed-rate term loan. With an unconventional loan, you have more choices, such as a balloon loan or an adjustable-rate mortgage.

Unconventional Loans at Option Funding, Inc.

Don’t give up on your hope of becoming a homeowner without first discussing your options with Option Funding, Inc. As our name suggests, we have the options you are looking for to qualify for financing and get the loan you need to finally make your move. We have been helping future homeowners just like you for over 20 years.

There are many flexible options that will fit into your personal financial goals, including VA loans, FHA loans, NON-QM loans, jumbo loans, interest-only loans, bank statement loans, and more.

Falling on hard times, having bad credit, or having a lower income should not keep you from being able to put down roots in a community you love. All you need is the right team of loan advisors to help guide you along the way.

Questions? Contact Ahmad Azizi at Option Funding, Inc. in Westlake Village to secure a mortgage option just for you.

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6 Pros of Buying a Home During the Holidays

Shopping is a huge deal during the holidays. The stores are bustling with shoppers looking for the latest gadgets, the hottest outfits, and the best toys a kid could ever wish for. Holiday tunes are pouring out of the speakers amidst the sounds of the cash registers constantly chiming with sales.

While it may be a great time for retailers, what about homebuyers? Is a house on your shopping list for the holidays?

Believe it or not, taking out a mortgage and buying a home during the holidays is often a great idea – and here are 6 reasons why.

1. Fewer Buyers in the Market

Remember, during the holidays, people are busy shopping with their friends and family trying to gather the perfect gifts. The last thing on their mind is the housing market.

Because of this, the market tends to slow down over the holiday season. So, if you are a buyer, you may have less competition with fewer offers being made – and it could boost your chance of landing your future dream house.

2. Motivated Sellers

Just as everyone is out enjoying the holidays, sellers who aren’t too motivated will likely wait until after the holiday season to list their property. That way they can enjoy the holidays without having to deal with the stress of staging their home and going through the entire real estate transaction process in a season that is already busy.

In other words, if you see an active listing during the holidays, you can feel confident that the seller is most likely motivated to sell. They may be willing to negotiate with you when it comes to things like the sales price and/or the closing costs.

Keep in mind that many homes are staged when they are trying to sell. And during the holidays, the staging really tries to pull at your emotions as it is the season for warm feelings. Don’t get lost in the emotion and make a poor decision. Be objective.

3. Lower Home Prices

For those who do the research, December seems to always be the month with the lowest home prices. As mentioned above, this probably has to do with the combination of fewer people looking to buy homes and sellers who are eager to sell.

The good news is that because the home prices are lower, you can usually find yourself with more home than you initially thought you could get for the price of your loan.

This can be one of the biggest reasons buyers choose this time of year to buy their new home.

4. Potential Tax Benefits

Have you ever wondered why companies give their donations and make big purchases right at the end of the year? It is all about the tax benefits.

Buying a home will give you some huge tax advantages. If you buy the home this year, then you get to experience the perks going into the new year when you file your taxes. On the other hand, if you wait until January to finalize your purchase, you will have to wait until the following year to reap the tax benefits.

For those who are out there searching for properties while everyone else is looking for gifts, there is always a big push to have that closing by December 31st – all for the tax benefits.

5. Quicker Loan Approval

During the spring and summer months, mortgage lenders are often overloaded with applications and the process to get approved can be very slow. However, during the winter holiday months, applications slow down which can be great news for you. Mortgage lenders can pump out quick loan approvals during this slow season which can really help you get your search started quickly.

It is worth mentioning, too, that since the volume is lower, the level of customer service is often higher. And who doesn’t love a great customer service experience?

6. An Overall Better Home-Buying Experience

When buying a home during the holidays, you open yourself up for a great experience. You don’t have to fight with others trying to get in to see a place for sale, nor do you have to battle competition when putting in an offer.

It is the holidays, and everyone in this industry is a little happier, and a lot less stressed. So, you can enjoy everything that comes with home buying without all the hassle. And that makes this a great time to buy.

Besides – what better way to kick off the new year than in your new home?

Tips for Buying a Home During the Holidays

It may be a great time of year to buy a home, but there are a few things you can do to ensure that everything goes as smoothly as you envision. Check out these tips:

  • Always get pre-approved for your loan. Don’t hold off just because the market doesn’t seem busy.
  • Find a great realtor. Having an expert on your side with your best interest in mind can be a game-changer.
  • Know that some sellers can be pushy. Remember, sellers this time of year are motivated so they may come off a bit aggressive so be prepared.
  • Again, don’t get caught up in the emotions. Someone who has a well-staged home may be able to entice buyers purely on their feelings. Tread lightly or you may regret it later.
  • Don’t be afraid to negotiate. Many buyers are afraid to negotiate in case the seller decides to go with someone else. Don’t be afraid. Let your realtor be the messenger.

Buying a home anytime is exciting (albeit stressful) even more so during the holiday season. Take advantage of all the potential benefits: such as less competition, motivated sellers, potential tax benefits, and quicker loan approval.

You may just find great satisfaction in the overall experience as you move into your new home in the new year.


Different Types of Mortgages Explained

Before you get too deep in your search for a new home, you will want to secure your financing. You may know a thing or two about traditional mortgages, but did you know that they are not your only option and that different types of mortgages are available?

What are the Different Types of Mortgages?

Before applying for a mortgage and making a final decision, you will want to consider and research all mortgage options. And taking a closer look at things like your credit score, your income, the type of home you’d like to buy, etc., will help you narrow down the best type for you.

First things first, though – know your options. So, let’s talk about some of the different types of mortgages available.

Conventional Loans

Conventional loans are those that come from a bank or other type of private lender. They often require a specific level of stable income, credit score, and down payment. These loans can vary greatly in their amounts, but a conforming loan is meant to be sold to government-supported companies like Fannie Mae or Freddie Mac and has a general cap of around $647,200 as of 2022. The majority of homebuyers use this type of loan.

These loans tend to cost less than other types of loans and have a fairly simple application process, too. The downfall is that not everyone will qualify for them.

FHA Loans

FHA loans are loans that are offered by private lenders and insured by the Federal Housing Administration (hence their name). The eligibility criteria for these loans tend to make it much easier for more people to qualify for a loan. For instance, those with lower credit scores may find that this is a great fit – though it is important to keep in mind that the down payment may also vary depending on the credit score.

For individuals who may not qualify for a conventional loan, an FHA loan may be the next best thing.

VA Loans

VA loans are reserved for veterans or those who are actively serving in the U.S. military. These loans are backed by the U.S. Department of Veterans Affairs and are designed to help veterans buy homes. You must have been in the military for a certain length of time to qualify.

VA loans come from a private lender, but they are guaranteed, in part, by the government. As a result, it makes it easier to get access to better interest rates and loan terms, even with not-so-great credit. Plus, there is no down payment required.

USDA Loans

The U.S. Department of Agriculture provides loans to low-income and middle-income families looking to buy homes in rural areas. Depending on which route you choose, the USDA loan could be your direct lender or guarantee loans made by private lenders. These are often fixed-rate loans without the need for a down payment.

There are a few criteria that must be met in order to qualify for these types of loans, such as living in an area with a population of less than 35,000, being unable to afford conventional loans, and having an income that doesn’t surpass a certain % of the median income for the area.

Due to the nature of these loans, you will have to prove that you are able to pay them back.

Jumbo Loans

Individuals who are purchasing a home that is quite costly may not be able to just get by with a conventional loan since there is a cap on conforming loans. Instead, non-conforming jumbo loans go up into the millions and are often the best option for those seeking out these high-priced homes.

Due to the risk involved with the large sum of money, this type of loan often requires a significant down payment, and the costs you may incur throughout the process may be higher than you’d expect with a conventional loan.

Know This Before Choosing Your Home Loan

While deciding between the different types of mortgages, there are a few things you may encounter that you will want to consider. For instance, what is the difference between a variable and a fixed loan? How long should you take out a loan? What happens if you are buying a new construction home? 

Interest Rates

In a nutshell, fixed-rate loans offer a fixed interest rate that never changes throughout the life of the loan. Variable-rate loans – also referred to as adjustable-rate mortgages – have a fluctuating interest rate that can increase or decrease based on market conditions.

It is not uncommon for some loans to start out with a fixed interest rate and then switch to an adjustable rate after a number of years. These loans can be risky as you never know what the future holds, but their appeal is the low-interest rate at the beginning. When deciding between the two, don’t hesitate to consider your long–term plans.

Term Length

You will encounter the fact that all loan terms are not the same. The most commonly available loan terms are 15-year, 20-year, and 30-year. The length you choose will depend on many different factors, but know that the shorter the term length, the more you save in interest.

New Construction

If you are buying a new home that has not been built yet, short-term construction loans are available to fund the building. Often these loans can be converted to a regular mortgage once the construction phase is complete.

Choosing the Right Mortgage

Buying a home is one of the biggest investments you will make in a lifetime. So, as you head out on your quest to find the perfect home, know that the perfect mortgage is out there for you, too. Don’t just go with what you know, but take the time to learn about your options so that you can choose one that is the best fit.

Whether a conventional loan, an FHA loan, a USDA loan, a VA loan, a jumbo loan or something else, there are loans you may benefit from – regardless of where you want to purchase your home or what your financial situation is like.

For more information about the different types of mortgages, contact Ahmad Azizi at Option Funding, Inc. – your local mortgage lender in Westlake Village, California.


Disclaimer: Please be advised that these are just some of the mortgage options available and not an extensive list. At Option Funding, Inc., we offer a range of home loans, including bank statement loans, hard money loans, non-qm loans, refinance loans, reverse mortgages, zero down loans, and unconventional loans.

Give us a call today for more information.
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7 Benefits of a First Time Home Buyer

Taking out a mortgage to buy a home for the first time can be as scary as it is exciting. After all, there are so many unknowns – and it is likely to be the biggest investment you have made in your life thus far. While you navigate these waters and determine what it is you are looking for in your future home, there are a few benefits of a first time home buyer that you will not want to miss.

So, who is considered a first time homebuyer? It can depend, but it is usually defined as someone who has never owned a home before. But that’s not all. First time homebuyers can typically be considered as those who have not owned (or co-owned) their principal place of residence anytime within the last three years.

What are the Benefits of a First Time Home Buyer?

Below are seven benefits of a first time home buyer that you won’t want to miss out on!

1. Take Advantage of First Time Home Buyer Programs

When you are a first time home buyer, you get to take advantage of some really helpful programs. This includes being able to get approved for a loan if you have a lower credit score or even less money to put down as a down payment – two things that often prevent many people from becoming homeowners.

Purchasing a home is not something everyone can do easily. Yet, everyone should have the opportunity. With these programs, one of the benefits of a first time home buyer is the ability to take advantage of owning a home by getting a little extra help along the way.

2. More Lenient Qualification Requirements

While lenient qualification requirements come with many first time home buyer programs, it is important to focus on their role in helping individuals purchase homes. Having a good or excellent credit score is often necessary to secure a mortgage. However, not everyone has been able to maintain their credit over the years – and this can easily lead to a denied application.

Another common thing that lenders take into consideration is the debt-to-income (DTI) ratio of the buyer. This is the percentage that tells lenders how much money you will spend on paying off debts versus the amount of money you have coming in for income. Many mortgage companies require a certain DTI in order to qualify for a loan, but first time home buyers can take advantage of more relaxed requirements when it comes to this.

3. Down Payment Assistance

As mentioned above, coming up with large amounts of money for down payments can be tough, too – and not something everyone can do. One of the benefits of a first time home buyer is that you may not have to worry about it. There are programs available that may provide you with grants or forgivable loans that provide you with down payment assistance. They may even cover your closing costs too.

Keep in mind that there are many different programs that are offered by local and state housing authorities. Each program has a different set of qualifications, so if you don’t qualify for one, you may qualify for another – so always do your due diligence.

4. No More Rent Payments

Rent payments can add up over the years – and tenants are left with nothing to show for all they have spent. Not to mention that in many places, landlords have the opportunity to raise the rent each year, and they can choose not to re-rent the space when the lease is up. As a result, tenants are often left without any stability for the future.

When buying a new home as a first time home buyer, you gain access to monthly mortgage payments that are predictable. And each payment you make is going to go toward building the equity in a home that is yours.

5. Owning an Appreciating Investment

A home’s value will change over time. If you invest in a property as a first time home buyer, there is a good chance that your home will be worth more in the future. Everything you put into your home can boost its value – which means the money is never spent for nothing (much like a rent payment).

Without opportunities such as first time home buyer programs, many new homeowners will never have the ability to hold such an asset.

6. Protection For Your Future

Getting older and not having a place of your own to call home can make you a bit nervous. And rising rents combined with near-stagnant social security income once you retire can leave the future with a lot of unknowns.

One of the best benefits of being a first time home buyer is that it’s an investment in your future. As you own it, it can begin to appreciate over time. Then, as you get older and have more invested in the property, it can be a great benefit. You may even pay it off and no longer have a mortgage payment which will be great news. Or, should you decide to downsize, selling your home that has appreciated will bring you a great reward. This additional money can become a nest egg for your future.

7. Potential Tax Benefits

The IRS offers tax deductions for those who own their own home. In other words, it gives an incentive for individuals – and first time home buyers – to take that step. The type of tax deduction, as well as how much the deduction is, will vary. The key is to know that when you invest in a home, you are potentially having a positive impact on your tax return which can result in savings each year. 

Think about how this can add up over time!

Reap the Benefits of Being a First Time Home Buyer

It is not uncommon for some individuals to think that they can’t become homeowners for one reason or another. The more you can learn about the options available and the benefits of being a first time home buyer, the greater chance of success you will have when it comes to getting the new house keys in your hand. 

There are so many opportunities for those that have not previously owned or co-owned their home. At Option Funding Inc in Westlake Village, we can provide you with loans for down payments, lower down payments, more lenient debt requirements, and even lower credit scores. Call us today and see what we can do for you!

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The Do’s and Don’ts When Buying a Home for the First Time

Purchasing your first home and taking out a mortgage option is perhaps the biggest investment you have made in your life thus far – and you don’t want to mess it up. But getting caught up in finding the perfect home and dreaming about what life would look like in it is so easy. This leads to many costly mistakes, and you’ll wish that you followed the typical do’s and don’ts when buying a home for the first time.

Do’s and Don’ts When Buying a Home

To help you successfully get those keys in hand at the closing, here are a few do’s and don’ts you should follow, especially if you’re new to the home buying market.

1. DO Get Approved For a Mortgage Before You Make an Offer

The market in many areas is still really busy, with many sellers getting multiple offers. So, without a pre-approval, you are too great of a risk for the seller. There is no guarantee that you will be given a chance – especially if there are other offers from either cash buyers or those who have been pre-approved by a lender.

Apply for your mortgage before you make an offer to get the best chance of securing your new home.

2. DON’T Apply With Just One Lender

There are so many lenders and mortgage experts out there, and they don’t all offer you the same thing. Just as you wouldn’t likely run out and buy a car without shopping around, you shouldn’t do that with a mortgage – which is an even greater investment.

Look into what different lenders have to offer and, for those that look ideal, apply with them. Never settle for just one.

3. DO Work with a Mortgage Consultant

Applying for a mortgage can be a time-consuming project, especially gathering all the specific loan process documentation required. And since you don’t want to apply with just one lender, going through this process over and over can be tedious and rather exhausting. The worst part is that you never know whether the lender is likely to approve you, what their rates tend to be, and so forth.

You can make your life so much easier when you work with a mortgage consultant. This is a great way to have access to those who have extensive knowledge in the field and a network of potential lenders. Based on your circumstances, they can help you determine the best loan programs and/or lenders to meet your needs – without wasting your time.

4. DON’T Spend Every Penny

The more money you have for a down payment, the smaller the mortgage you will need to take out. Unfortunately, coming up with a large sum down payment can be challenging. Many first-time homebuyers try to take everything they have and add it to this payment, leaving them with absolutely no emergency fund. As helpful as a large down payment may be, becoming this vulnerable can be dangerous.

Your down payment should be about 20% when buying a new home, but it doesn’t have to be. Depending on the loan programs you qualify for, you may find something that will allow you to purchase with no money down or even less than 5% down.

Save the money you can for your down payment without allowing yourself to go into debt – and without eating up everything you have. If you can come up with a large down payment, fantastic. If you need to find a loan program that allows much less, then that is ok, too. You don’t want to kick off life in your new home without having anything extra set aside.

5. DO Take Care of Your Credit

Speaking of not going into debt, your credit is incredibly important to lenders. You need to ensure that your credit is intact and in a good range before you try to buy a house. Many lenders have certain minimum requirements for the credit score and debt-to-income ratio in order to be approved for a mortgage.

Check your credit report to get an idea of where you currently stand. You can reach out to the major credit reporting agencies directly, such as TransUnionExperian, or Equifax. Or, you can use a credit report service to get an idea of your standing. Checking your own score like this will not impact your credit.

Keep an eye out for any negative account information, like late or missed payments. This can have a negative impact. Anything that is older than seven years old, accounts you do not recognize, those that have been listed more than once, and the like need to be addressed.

Take steps to clear up your credit report in order to help boost your score and better your chances of getting approved for a loan.

6. DON’T Apply For Credit Before the Loan Funds

Before your loan has been funded is not the time to apply for credit. That means don’t try to open a line of credit, apply for credit cards, buy a car or a boat, etc., after you have received a pre-approval and before the transaction is finalized and closed. This needs to be a dormant period for your credit because you don’t want anything to change unless it is for the better.

See, your lender approved your loan based on your credit score and your debt-to-income ratio. Anytime you apply for credit, your score will drop a couple of points, and your ratio can increase. Before the closing, your lender will re-run your credit to confirm everything is still good. Any new changes could increase your rate or even cost you the mortgage.

7. DO Stick to What You Can Afford

Who doesn’t want a huge, beautiful house with all the perks and luxurious add-ons? Everyone has a price range that they can comfortably afford – and that is the range in which you need to stick to when you buy a house.

Since there is no reason why you should get your hopes up for a house you can’t afford, it is important to have an idea of what can fit into your budget. And, if possible, focus on the lower end of that range. Using a mortgage calculator can help you to determine just how much home you can afford.

Take Your Time

When it comes to buying a home for the first time, it is important that you don’t rush into things but rather take your time. There are many do’s and don’ts when buying a home that you will want to follow so that the entire process flows as smoothly as you envisioned it.

Visit Option Funding Inc in Westlake Village for more information about home loan options, mortgages, and homebuying tips.

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