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in Carson, CA
Most self-employed borrowers in Carson face the same problem: their tax returns show minimal income after write-offs. Both bank statement and P&L loans solve this by documenting income differently than conventional mortgages.
The choice between them comes down to your cash flow pattern and whether you have a CPA relationship. One uses your actual deposits, the other uses your business financials prepared by an accountant.
Bank statement loans calculate income from 12 or 24 months of business or personal bank deposits. Underwriters apply an expense factor (usually 25-50%) to account for business costs not shown in the statements.
You'll need consistent deposits and clean bank records. Lenders look for regular income patterns, not sporadic large deposits that suggest one-time events rather than ongoing revenue.
This option works best if you don't use a CPA or run a cash-heavy business. It's also faster since you're not waiting for financial statement preparation.
P&L loans use a CPA-prepared profit and loss statement covering 12-24 months. The statement must be signed and certified by a licensed accountant, not just prepared by a bookkeeper.
Your qualifying income comes directly from the net profit shown on the P&L. Lenders typically require a year-to-date statement plus the prior year, both prepared by the same CPA.
This route makes sense if you already work with a CPA for your business. It often shows higher qualifying income than bank statements since it captures all revenue sources, not just deposits.
The core difference is documentation speed versus income calculation. Bank statements are faster since you just download them from your account. P&L statements take time for CPA preparation but often yield higher qualifying income.
Cost differs too. Bank statement loans have no CPA fee but may show lower income after expense factors. P&L loans require paying your accountant but the certified financials often justify larger loan amounts.
Both typically require 10-20% down for purchases in Carson. Rates run similar, usually 1-2% above conventional rates. Credit score minimums hover around 620-640 for both programs.
Choose bank statements if you handle your own books, receive consistent deposits, or need to close quickly. This works well for contractors, consultants, and service businesses with straightforward cash flow.
Go with P&L statements if you already use a CPA, have multiple income sources, or show strong net profit that exceeds your bank deposits. This fits established businesses with complex financials.
Many Carson borrowers shopping in the $600K-$800K range find bank statements simpler. Above $1M, P&L statements often make more sense since the higher qualifying income justifies the CPA expense.
Yes, but it restarts underwriting and delays closing by 2-3 weeks. Better to choose upfront based on which shows stronger income.
Both permit cash-out refi up to 75-80% LTV. Bank statement loans process faster since you skip CPA preparation time.
Rates run nearly identical, typically 1-2% above conventional. Your credit score and down payment affect pricing more than documentation type.
No. Lenders require a licensed CPA signature and certification. Bookkeeper-prepared statements don't meet non-QM underwriting standards.
Most programs require 12 months minimum, 24 months preferred. Longer history improves approval odds if income fluctuates seasonally.