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in Lawndale, CA
Both options serve self-employed borrowers who can't show W-2 income. The difference is how you prove what you make.
Bank statement loans pull income from deposit patterns. P&L loans require a CPA to sign off on your business earnings.
Most Lawndale borrowers pick based on how their business operates. A contractor with steady deposits chooses differently than a consultant with irregular income spikes.
You submit 12 or 24 months of personal or business bank statements. The lender averages your deposits to calculate qualifying income.
This works for borrowers who deposit most revenue but write off everything come tax time. Your tax returns show low income, but your bank account tells the real story.
Expect rates 1-2% higher than conventional mortgages. You need 10-20% down depending on credit score and debt ratios.
A licensed CPA prepares a profit and loss statement covering one or two years. That document becomes your income proof.
This route fits borrowers with clean books and a CPA relationship already in place. If you file detailed business returns, the P&L often mirrors what you already track.
Down payment requirements match bank statement loans. Rates run similar, sometimes slightly better with strong financials.
Bank statement loans count deposits minus irregular transfers. P&L loans use net profit after expenses as calculated by your CPA.
Bank statements process faster because we're just reviewing deposits. P&L loans add time while your CPA prepares the statement and we verify their credentials.
Bank statement works when your business account shows consistent deposits but your tax returns look lean. P&L works when your CPA already tracks everything and your books are tight.
Pick bank statements if you run cash flow through your account but write off aggressively on taxes. Also choose this if you don't have a CPA relationship or need to close quickly.
Pick P&L if you already work with a CPA who knows your business inside out. This route makes sense when your books accurately reflect what you earn and you're not hiding income through deductions.
Neither option is cheaper or easier to qualify for. The right choice depends on how your business handles money and whether your documentation already exists.
No, you pick one income documentation method per loan. Lenders structure these as separate programs with different underwriting rules.
No CPA required. We calculate income directly from your bank deposits over 12 or 24 months.
Rates run nearly identical. Your credit score and down payment matter more than which documentation method you choose.
Most programs require 12 months minimum. Some lenders prefer 24 months for stronger income averaging.
No audit required. The CPA prepares and signs the statement showing business income and expenses over one or two years.
Switching restarts underwriting from scratch. Pick your documentation method before you apply to avoid delays.