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in Alhambra, CA
Both options help self-employed buyers prove income without tax returns. The difference is what counts as proof.
Alhambra's retail corridors and professional services create steady self-employment income. How you document it determines which loan fits.
Bank statement loans use 12 or 24 months of deposits to calculate income. Lenders average your monthly deposits, subtract expenses, and qualify you on that number.
You skip CPA fees and detailed P&L prep. Just provide personal or business bank statements showing consistent deposits.
Most lenders require 10-20% down. Credit minimums start at 620, though stronger scores unlock better rates.
P&L statement loans require a CPA-prepared profit and loss statement. Some lenders want just one year, others need two years of statements.
Your accountant signs off on your business income and expenses. Lenders use net profit to determine qualification.
Down payments run 10-25% depending on credit strength. Expect credit minimums around 640-660.
Bank statement loans work faster because you skip CPA prep. P&L loans take longer but often qualify you for higher amounts if your books show strong net profit.
Rate differences are minimal since both are non-QM products. Expect 1-2 points above conventional rates regardless of which path you choose.
Documentation depth matters most. Bank statements show cash flow but include all deposits. P&L statements isolate business profit but require professional preparation.
Choose bank statement loans if you write off heavy expenses that tank your net profit. Deposits paint a stronger income picture than P&L bottom lines for many self-employed borrowers.
Pick P&L loans if your books are clean and show strong net margins. Alhambra's medical professionals and consultants often qualify better this way.
Run both scenarios. Some months I'll qualify a borrower higher on bank statements, other months P&L wins. Your CPA can tell you which looks stronger before you commit.
Yes, most lenders accept either. Business accounts work better if you run all income through your company.
No, some lenders accept one year with strong credit and down payment. Requirements vary by lender overlay.
Bank statement loans close quicker since you skip CPA prep. Expect 21-30 days versus 30-45 for P&L loans.
Yes, but it restarts underwriting. Better to run scenarios upfront and pick the stronger qualifying method.
Most lenders want 6-12 months of reserves for either loan type. Higher loan amounts or weaker credit increase reserve requirements.