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in Glendora, CA
Both bank statement and P&L loans solve the same problem for Glendora's self-employed borrowers: getting a mortgage when your tax returns don't show your real income. The difference is how you prove what you actually make.
Most self-employed borrowers in Los Angeles County can qualify through either route. Your best option depends on how you run your books and what documentation you already have prepared.
Bank statement loans use 12 to 24 months of business or personal bank statements to calculate your qualifying income. Lenders average your monthly deposits, subtract business expenses shown in the statements, and use that number for approval.
This works best if you run most revenue through your accounts and keep minimal cash transactions. You need consistent deposit patterns and clean account management—overdrafts and frequent NSF fees hurt your case.
P&L statement loans require a CPA-prepared profit and loss statement covering at least 12 months of business activity. The lender uses your net profit figure as qualifying income, usually without requiring full tax returns.
This route makes sense if you already work with a CPA for business planning or have complex revenue streams that don't flow cleanly through bank accounts. Your accountant's license and signature carry the verification weight.
The core split is documentation style. Bank statement loans look at actual cash flow through your accounts. P&L loans rely on professionally prepared financials that may adjust for timing differences, non-cash expenses, or business structure.
Bank statement loans typically cost less upfront since you skip the CPA fees. But P&L loans can show higher qualifying income if you have significant write-offs or depreciation that reduce deposits but don't reflect true cash flow. Rates vary by borrower profile and market conditions.
Choose bank statements if you have straightforward deposit patterns and don't currently use a CPA. It's faster and cheaper. Choose P&L if you have an accountant relationship, complex business structures, or significant expenses that don't show up in bank transactions.
Most Glendora contractors, real estate agents, and consultants go the bank statement route. Business owners with inventory, equipment, or multiple entities usually benefit from the P&L approach. Both require similar credit scores and down payments—usually 10-20% down and 620+ credit.
Yes, but it restarts underwriting and delays closing. Pick the right path upfront based on which documentation you can provide cleanly.
Usually, yes. Non-QM loans price for additional risk, typically 0.5-2% above conventional rates depending on your profile.
Lenders average across the full period, but wild swings reduce qualifying income. P&L statements smooth out seasonal variations better.
No. Any licensed CPA in good standing works, regardless of location or whether they're your regular accountant.
Some lenders allow hybrid approaches, but most require one method or the other. Mixing documentation usually complicates underwriting unnecessarily.