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in Moraga, CA
Self-employed borrowers in Moraga have two strong non-QM options for documenting income. Bank statement loans and P&L statement loans each offer paths to homeownership without traditional W-2 verification.
Both loan types recognize that business owners and independent contractors earn income differently than salaried employees. Understanding the key differences helps you choose the option that aligns with your financial documentation and business structure.
Bank statement loans use 12 to 24 months of personal or business bank statements to verify your income. Lenders analyze deposits to calculate qualifying income, typically averaging monthly deposits over the statement period.
This option works well if you have consistent bank deposits but significant tax write-offs that reduce your reported taxable income. The statements show your actual cash flow rather than taxable income from your returns.
Most bank statement programs require 10% to 20% down payment for Moraga properties. Rates vary by borrower profile and market conditions, with pricing typically higher than conventional loans due to the flexible documentation.
P&L statement loans require a CPA-prepared profit and loss statement to document your business income. This formal financial statement provides a professional accounting of your business revenue and expenses.
This option appeals to established business owners who already maintain CPA-prepared financials for their operations. The CPA preparation adds credibility to your income documentation in the eyes of lenders.
P&L loans often require similar down payments as bank statement programs. The main difference lies in the documentation method rather than loan terms, giving you flexibility based on what financial records you already maintain.
The primary difference is documentation source. Bank statement loans use your actual bank deposits, while P&L loans rely on CPA-prepared financial statements showing business profitability.
Bank statement loans work faster if you have statements ready but no formal CPA relationship. P&L loans make sense when you already work with a CPA and maintain detailed business financials.
Cost considerations differ slightly. Bank statement loans only require gathering existing statements. P&L loans need CPA preparation fees if you don't already have recent statements prepared.
Both options typically price similarly in terms of interest rates and fees. Your choice depends more on which documentation you can provide most easily and accurately.
Choose bank statement loans if you have consistent deposits but don't work regularly with a CPA. This option works well for contractors, freelancers, and small business owners who maximize tax deductions.
Select P&L loans if you maintain CPA-prepared financials for your business. Established business owners, partnerships, and corporations often find this path more natural since they already produce these statements.
Some Moraga borrowers qualify under both programs. In those cases, compare which documentation presents your income most favorably and which you can gather most quickly for your purchase timeline.
Working with an experienced non-QM lender helps you determine which program maximizes your buying power based on your specific business structure and financial documentation.
Generally you'll choose one documentation method per loan application. Some lenders may review both to determine which presents your income most favorably, but the loan underwrites using one primary method.
Yes, you'll need a CPA to prepare your profit and loss statement specifically for the loan. The CPA must be licensed and willing to verify they prepared your financials for mortgage purposes.
Rates are typically similar between both programs. Your actual rate depends on credit score, down payment, and overall borrower profile rather than which documentation method you use.
Most bank statement programs require 12 to 24 months of consecutive statements. The longer period helps lenders establish consistent income patterns for self-employed borrowers.
Switching documentation methods restarts underwriting review. It's better to determine the best option before applying to avoid delays in your Moraga home purchase timeline.