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Profit & Loss Statement Loans in Hermosa Beach
Hermosa Beach runs on entrepreneurs and business owners who don't fit the W-2 mold. Tech consultants, real estate agents, restaurant owners—they all share the same mortgage problem: strong income that doesn't show up cleanly on tax returns.
P&L statement loans solve this by using year-to-date financials from your CPA instead of two years of tax returns. You prove income through current business performance, not last year's write-offs.
You need a CPA or licensed tax professional to prepare your profit and loss statement covering at least 12 months. The P&L must match your business structure—sole prop, LLC, S-corp, whatever you file under.
Most lenders want 640+ credit and 15-20% down minimum. They'll still pull business bank statements to verify the P&L numbers aren't fiction. Two years in the same business or industry is standard.
Only non-QM lenders offer true P&L programs—you won't find these at Chase or Wells Fargo. Rates run 1-2% above conventional because you're bypassing traditional income verification.
The P&L calculation method varies by lender. Some average 12 months, others use 24 months or year-to-date trending. A broker matters here because one lender's math might qualify you while another's doesn't.
P&L loans work best when your recent income is strong but your tax returns are a mess of deductions. If your accountant has you writing off everything to minimize taxes, this loan shows what you actually make.
Timing matters. Most lenders want the P&L dated within 90 days of closing, so don't get it prepared too early. And if your business is seasonal, make sure the 12-month period captures your full cycle.
Bank statement loans skip the CPA requirement entirely—you just provide 12-24 months of deposits. P&L loans typically qualify you for more because they use gross profit, not deposits minus expenses.
1099 loans work if you're a contractor with straightforward income. But if you run an actual business with overhead and multiple revenue streams, P&L gives you better leverage. Asset depletion makes sense if you have liquid assets but minimal business income.
Hermosa Beach home prices demand strong qualifying income. A P&L loan helps beach-area business owners compete with tech employees on straight W-2 salaries.
Many Hermosa borrowers are real estate investors or agents whose income fluctuates quarterly. The P&L captures commission cycles and investment income that looks erratic on bank statements but steady over 12 months.
They need to be a licensed CPA, EA, or tax attorney. Most lenders verify the preparer's credentials and may contact them directly during underwriting.
Typically no. Most programs require two years in business or the same industry to establish income stability and reduce lender risk.
Lenders will investigate the gap. Small differences for timing are fine, but major discrepancies between P&L and bank activity kill deals.
Expect 1-2% above conventional rates. Actual pricing depends on credit score, down payment, and your specific business income profile.
Yes, if you own multiple entities. The CPA prepares consolidated financials or separate P&Ls for each business you want to use for qualifying.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.