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in Arcadia, CA
Arcadia's self-employed professionals need mortgages that work around tax write-offs. Both bank statement and P&L loans skip tax returns entirely.
The difference comes down to your documentation habits. One uses raw deposits, the other uses an accountant's summary.
Most self-employed borrowers qualify for one but not the other. Your business structure and record-keeping determine which path works.
Bank statement loans use 12 to 24 months of business or personal bank statements to calculate income. Lenders analyze deposits and apply a percentage to determine qualifying income.
You don't need formal P&L statements or a CPA. As long as deposits show consistent income, you can qualify.
Most lenders require 10-20% down and accept credit scores around 620. Rates run 1-2% higher than conventional mortgages.
P&L statement loans require a CPA-prepared profit and loss statement covering 12-24 months. Some lenders also want a balance sheet.
Your accountant calculates net income after expenses. That number becomes your qualifying income—no deposit analysis needed.
These loans typically need 15-20% down and 640+ credit. Rates match or slightly exceed bank statement loan pricing.
Bank statement loans look at gross deposits. P&L loans use net profit after expenses. If you write off most income, bank statements show higher qualifying numbers.
P&L loans demand formal accounting. Bank statement loans work for borrowers who don't keep detailed books or use a CPA regularly.
Some lenders price P&L loans slightly better because CPA documentation carries less fraud risk. The difference is usually 0.25-0.5% in rate.
Choose bank statement loans if you don't use a CPA or if heavy write-offs crush your net income. The deposit-based calculation captures revenue before expenses hit.
Pick P&L loans if you already maintain formal books and your net profit supports the mortgage payment. Some lenders approve these faster since CPAs reduce documentation risk.
For Arcadia's higher home prices, bank statement loans often qualify self-employed buyers for larger amounts. The gross deposit method inflates income compared to net profit calculations.
Yes. Most lenders accept personal statements if your business income deposits there. They calculate income from total deposits minus non-income items like transfers.
Your CPA must hold an active license in good standing. Some lenders require the CPA to have prepared your taxes for at least one year.
Bank statement loans typically close in 21-30 days. P&L loans close in 25-35 days since underwriters review the CPA's work and license status.
Yes, but you'll restart underwriting. Some borrowers switch when bank statements show too much variability or don't support the needed loan amount.
Most lenders cap cash-out at 75-80% LTV for both programs. Rate-and-term refinances go up to 85-90% LTV depending on credit and property type.