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in Rolling Hills, CA
Rolling Hills homebuyers who own their own businesses face a challenge. Traditional lenders reject tax returns that show aggressive write-offs.
Two non-QM options solve this problem differently. Bank statement loans use deposit patterns to prove income. P&L loans rely on CPA-prepared financials.
Most self-employed borrowers qualify for both. The right choice depends on how you run your books and which documentation you already have.
Bank statement loans use 12 to 24 months of business or personal bank statements to calculate income. Lenders average your monthly deposits and apply a percentage based on your business type.
This works best for borrowers who show consistent cash flow but write off most profits. You avoid the tax return trap that kills conventional approvals.
Expect higher rates than conventional loans but faster approval. Most lenders require 10-20% down and credit scores above 620.
P&L statement loans use a CPA-prepared profit and loss statement to verify income. Your accountant creates a current financial snapshot that shows what you actually earn.
This route makes sense if you already work with a CPA who knows your business. The statement must be signed and dated, often within 90 days of application.
Down payment and credit requirements mirror bank statement loans. Rates vary by borrower profile and market conditions but typically run higher than conventional.
The main split comes down to documentation you already have. Bank statements are automatic if you run deposits through business accounts. P&L statements require active CPA involvement.
Bank statement loans look at gross deposits, then apply expense ratios. P&L loans use net profit after your accountant's adjustments. This creates different qualifying income numbers from the same business.
Processing time differs too. Bank statements get uploaded and analyzed quickly. P&L loans wait on your CPA's schedule and signature.
Choose bank statement loans if you run consistent deposits but lack CPA prep. They work great for contractors, consultants, and service businesses with predictable cash flow.
Go with P&L loans if you already pay a CPA and want cleaner income presentation. This matters when your deposit patterns are irregular or you run multiple accounts.
Rolling Hills deals often involve higher loan amounts. Run both scenarios before choosing. Sometimes P&L income qualifies you for more house than bank statement calculations.
Yes. Most lenders accept personal statements if business income runs through them. Expect higher expense ratio deductions on personal accounts.
Your CPA must be licensed and in good standing. They'll sign the statement attesting to its accuracy based on your business records.
Rates are similar across both programs. Your credit score and down payment affect pricing more than documentation type.
Yes, but it restarts underwriting. Pick your documentation route before applying to avoid delays in competitive Rolling Hills offers.
Yes. Both programs work for purchases and refinances with cash-out options available based on equity position.