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in Monrovia, CA
Both bank statement and P&L loans serve self-employed Monrovia borrowers who can't use tax returns. The difference comes down to how you prove income and what your accountant wrote off.
Most self-employed buyers qualify for one but not both. Your approval path depends on how long you've been in business and what shows up in your accounts.
Bank statement loans use 12 or 24 months of business or personal deposits to calculate income. Lenders average your monthly deposits and apply a percentage based on your business type.
You skip the CPA requirement entirely. Most lenders accept statements straight from your bank, though some want them certified.
This works best when you deposit most of your revenue and haven't moved large sums between accounts. Irregular deposits get averaged out over the full statement period.
P&L loans use a CPA-prepared profit and loss statement to verify income. Your accountant calculates profit after expenses for the most recent 12 or 24 months.
You need a CPA who will sign off on your numbers. The P&L must match your business structure and show enough profit to support the mortgage payment.
This route works when your tax returns show heavy write-offs but your actual profit is strong. The P&L captures income before those strategic deductions.
Bank statements show what you actually deposited. P&L statements show what you earned minus expenses. If you write off 40% of revenue, your P&L will show higher income.
Bank statement loans process faster because there's no CPA coordination. P&L loans often qualify you for more money because expenses don't reduce your income calculation as heavily.
Credit requirements run similar for both, usually 620 minimum. Down payment starts at 10-15% depending on the lender and your specific income documentation strength.
Choose bank statements if you deposit most revenue and want fast approval. This works for contractors, consultants, and service businesses with straightforward deposit patterns.
Go with a P&L if your tax returns are heavily written down but you have a CPA relationship. Real estate agents, medical professionals, and established businesses often get better numbers this way.
Some Monrovia borrowers can qualify under both programs. We run scenarios with each method to see which produces the higher qualifying income for your price range.
No, lenders use one income verification method per loan. We choose whichever produces the higher qualifying income based on your documentation.
Yes, both are non-QM loans with rates typically 0.5-2% above conventional. Rates vary by borrower profile and market conditions.
Bank statement loans close in 21-30 days typically. P&L loans take 25-35 days due to CPA coordination and verification time.
Most lenders require 20% down to skip PMI on non-QM loans. Some programs allow it at 15% with higher rates.
Lenders exclude irregular deposits like refinances or transfers. We document these so they don't inflate your income calculation artificially.
Your CPA must be licensed and in good standing. They sign a standard form stating the P&L accurately reflects your business income.