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in Union City, CA
Self-employed borrowers in Union City face a common challenge: traditional lenders want tax returns that often don't reflect your true earning power. Both bank statement and profit & loss statement loans solve this problem through alternative income verification.
These non-QM options help Union City entrepreneurs, freelancers, and business owners qualify for mortgages without traditional W-2s. The main difference lies in how each program documents your income and what financial records you'll need to provide.
Bank statement loans use 12 to 24 months of personal or business bank deposits to calculate your qualifying income. Lenders review your statements to identify regular income patterns and average your deposits over the review period.
This option works well if you maintain consistent bank deposits and have clean banking records. Your income is typically calculated by taking your average monthly deposits and multiplying by a percentage, often 50-75%, to account for business expenses.
Union City borrowers typically need a 10-20% down payment and credit scores around 620 or higher. Rates vary by borrower profile and market conditions, but expect rates slightly higher than conventional loans.
Profit and loss statement loans require a CPA-prepared P&L covering at least one year of business activity. Your accountant must be licensed and your P&L needs to follow standard accounting practices to satisfy lender requirements.
This approach provides a more comprehensive view of your business finances. The CPA-prepared documentation carries more weight with lenders and can sometimes result in better terms for borrowers with strong business performance.
Most programs require 15-20% down and credit scores of 640 or above. You'll need an established relationship with a licensed CPA who can prepare and sign your profit and loss statement.
The biggest difference is documentation complexity. Bank statement loans are simpler—you just gather existing statements from your accounts. P&L loans require professional preparation by a licensed CPA, which adds cost but may provide more detailed income documentation.
Credit requirements tend to be slightly higher for P&L loans, and down payment expectations can differ. Bank statement programs often start at 10% down for strong borrowers, while P&L loans typically require 15% minimum.
Processing time varies as well. Bank statement loans can move faster since you're providing existing documents. P&L loans need time for your CPA to prepare current statements, potentially adding weeks to your timeline.
Choose bank statement loans if you have consistent deposit patterns, maintain organized banking records, and want a faster process. This option suits Union City borrowers who run cash-heavy businesses or prefer not to involve a CPA in the loan process.
P&L loans make sense if you already work with a CPA, have established business accounting systems, and want documentation that shows the full picture of your business health. This route works well for borrowers with complex business structures or fluctuating deposit patterns.
Consider your timeline and resources. If you need to close quickly and have clean bank records, bank statements offer speed. If you have time and want the credibility of CPA-prepared financials, the P&L route may serve you better.
Most lenders require you to choose one documentation method. However, having both available can strengthen your overall application and provide backup if issues arise with your primary documentation.
Rates vary by borrower profile and market conditions. Both programs price similarly, though P&L loans may receive slightly better terms if your CPA-prepared financials show strong, stable income.
Your CPA doesn't need to be local to Union City, but they must be licensed and able to prepare statements following standard accounting practices accepted by mortgage lenders.
Most bank statement programs require 12 to 24 months of consecutive statements. Gaps in your banking history can complicate approval or require additional documentation.
Yes, many P&L programs accept borrowers with just one year of self-employment history, provided your CPA can document a full year of business activity and income.