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in Plymouth, CA
Self-employed borrowers in Plymouth face a common problem: your tax returns don't show your real income. You write off everything you can, which tanks your qualifying income on paper.
Both bank statement and P&L loans solve this, but they work differently. One pulls straight from your deposits, the other needs your CPA involved. Choosing wrong costs you time and sometimes the deal.
Bank statement loans use 12 to 24 months of business or personal bank statements to calculate your income. Lenders average your deposits and apply an expense ratio—typically 25% to 50%—to arrive at qualifying income.
This works best if you have consistent deposits and minimal bounced payments or NSFs. The underwriter sees every transaction, so messy accounts hurt you. Clean statements mean faster approval.
P&L statement loans rely on a CPA-prepared profit and loss statement covering 12 to 24 months. Your accountant signs off on your income, and the lender uses that number to qualify you.
This path makes sense if your bank statements look chaotic—lots of transfers, irregular deposits, or commingled accounts. The P&L smooths everything into a clean income figure. You need a CPA willing to prepare and sign the document.
The biggest split is documentation speed versus income presentation. Bank statements are faster—no CPA, no waiting for tax prep. But every deposit gets scrutinized, and expense ratios cut into your qualifying number.
P&L loans take longer because you need a signed CPA statement. But they often show higher qualifying income since your accountant calculates net profit without arbitrary expense deductions. Rates vary by borrower profile and market conditions, but both options typically land in similar ranges.
Go with bank statements if your deposits are steady, your accounts are clean, and you want to close fast. This works well for contractors, consultants, and solo operators with straightforward cash flow.
Choose P&L if your bank statements are messy, you commingle funds, or your CPA can show strong net income that beats what a lender would calculate from deposits. In Plymouth's smaller market, having both options ready speeds up your search when inventory is tight.
Yes, most lenders accept personal statements if that's where your income lands. They'll still apply an expense ratio to calculate qualifying income.
No, these are non-QM loans that skip tax return verification. The P&L stands alone as your income documentation.
Rates are similar for both—pricing depends more on credit score, down payment, and overall risk profile than which income doc you use.
Most programs require 12 months minimum. Some lenders accept 24 months to show stronger income trends.
Yes, but it restarts underwriting. Pick your path before you go under contract to avoid delays.