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in Calabasas, CA
Calabasas has a high concentration of entrepreneurs, business owners, and entertainment professionals. Traditional mortgage underwriting doesn't work when your tax returns show minimal income but your bank account tells a different story.
Both bank statement and P&L loans bypass W-2 verification. The difference is how lenders calculate your qualifying income. One uses deposits, the other uses profit statements.
Bank statement loans use 12 or 24 months of business or personal bank statements to verify income. Lenders analyze deposits and apply an expense ratio to determine qualifying income.
Most lenders use a 50% expense factor for personal accounts and 25-50% for business accounts. If your statements show $20,000 monthly deposits on a personal account, you qualify at $10,000 per month.
These loans work best when you run cash through your accounts but write off heavily at tax time. No CPA letter needed. Just provide PDFs or official statements from your bank.
P&L loans require a CPA-prepared profit and loss statement covering one or two years. The underwriter uses your net profit figure to calculate qualifying income.
Your CPA must be licensed and typically needs a two-year history preparing your returns. Some lenders require a full compilation or review, others accept a standard P&L with CPA letterhead.
This route makes sense when your P&L shows strong profit even if your tax returns don't. You need an existing relationship with a CPA who understands mortgage underwriting expectations.
Bank statement loans focus on cash flow. P&L loans focus on profitability. If you have irregular deposits or mix personal and business expenses, bank statements tell a cleaner story.
P&L loans often qualify you at a higher income if your business genuinely profits. Bank statement programs assume 50% expenses regardless of your actual overhead. A low-margin business qualifies better with a P&L.
Pricing differs by lender but bank statement loans typically price slightly better. Both require 10-20% down depending on credit score and loan amount. Rates vary by borrower profile and market conditions.
Choose bank statements if your deposits are strong but your formal books don't reflect true income. This applies to most freelancers, contractors, and small business owners who write off aggressively.
Go with a P&L if you have clean books, a trusted CPA, and net profit that exceeds 50% of gross revenue. Also the right move if your bank statements show inconsistent deposits or heavy personal spending.
In Calabasas where many borrowers are high-income self-employed, we see bank statement loans close faster. No waiting for CPA letters. No explaining business deductions to underwriters. Just pull 24 months of statements and qualify.
No. Lenders require one documentation method per loan. You choose bank statements or P&L at application, not both.
Not always. Personal bank statements work if deposits clearly show business income. Business accounts usually require a license or EIN.
Most lenders use 100% of net profit shown on the P&L. Some average two years if provided.
Yes, but 24 months gets better pricing and higher approval odds. Some lenders require 24 months for loans above $1 million.
Minimum 620 for most programs. Higher rates and down payments apply below 680. Best pricing starts at 720.