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in Jackson, CA
Most self-employed borrowers in Jackson get stuck between two non-QM options: bank statement loans or P&L statement loans. Both verify income without tax returns, but they work completely differently.
Bank statement loans calculate income from deposits over 12-24 months. P&L loans rely on a CPA-prepared financial statement. Your business structure and how you pay yourself determine which path gets you approved.
Bank statement loans analyze 12 or 24 months of business or personal bank statements. Lenders add up deposits, apply an expense ratio (typically 25-50%), and calculate qualifying income from what remains.
You don't need a CPA or formal financial statements. Just consistent deposits that show you earn enough to afford the mortgage. Most lenders accept personal statements if business income flows through them.
P&L statement loans require a year-to-date profit and loss statement prepared by a licensed CPA. The lender uses the net income shown on that statement to calculate how much you qualify for.
This works well if you already maintain formal books for your business. The CPA signs off on your income, which gives lenders confidence in the numbers. You'll also need a business license and typically two years of self-employment history.
Bank statement loans cost less upfront since you skip CPA fees. But lenders deduct more for expenses, which can lower your qualifying income. P&L loans preserve more income if your actual expenses are low, but you'll pay $500-1500 for CPA preparation.
Documentation speed matters too. Bank statements come straight from your account in minutes. A CPA needs time to prepare a P&L, especially during tax season. If you're competing for a Jackson property, bank statements get you pre-approved faster.
Go with bank statements if you're a sole proprietor, freelancer, or contractor who doesn't keep formal books. Also choose this if you need fast approval or want to avoid CPA costs. This works for most self-employed borrowers in Amador County.
Choose P&L if you run a structured business with low overhead, already work with a CPA, or your bank deposits don't reflect true income. Business owners with multiple revenue streams or accounts often qualify for more with a P&L approach.
Yes, if business income flows through your personal account. Most lenders accept either or a combination of both for bank statement loans.
Yes, the CPA must hold an active license. Most lenders verify this directly before accepting the P&L statement.
Rates are similar since both are non-QM loans. Your credit score and down payment affect rates more than which documentation method you choose.
Usually yes, but it restarts underwriting. Choose your documentation path before applying to avoid delays.
Typically 10-20% minimum for both. Higher down payments improve rates and approval odds regardless of income documentation method.