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in Belvedere, CA
Self-employed buyers in Belvedere face a documentation choice before they shop rates. Both bank statement and P&L loans solve the same problem—getting approved without tax returns—but they demand different paperwork.
Your business structure determines which path makes sense. Most sole proprietors and single-member LLCs lean toward bank statements. Multi-partner firms and S-corps often need P&L documentation.
Bank statement loans calculate income from deposits. Lenders review 12 or 24 months of business or personal accounts. They average your deposits, apply an expense ratio—typically 50%—and use that figure to qualify you.
You need consistent deposit patterns, not perfect months. A few slow periods won't kill the deal if your average holds. Most lenders accept personal accounts when business and personal funds mix, which happens often with sole proprietors.
P&L loans require a CPA-prepared profit and loss statement covering 12 to 24 months. The CPA must be licensed and independent—your cousin who does taxes on the side won't count. Lenders verify the CPA's credentials before they review your numbers.
This route shows net profit after expenses, which can help borrowers with high operating costs. If you write off 70% of revenue through legitimate expenses, a P&L captures your actual profit better than bank statements with a standard 50% deduction.
Bank statements move faster and cost less upfront. You pull statements from your bank portal and submit them—no CPA fee required. P&L loans add $500 to $1,500 in CPA costs and extend your timeline by one to two weeks.
The income calculation flips the script on who benefits. Bank statements favor borrowers with low business expenses because lenders assume 50% overhead regardless of actual costs. P&L loans favor high-expense businesses that show strong net profit after legitimate deductions.
Run the math before you pick. If your business deposits $40,000 monthly with $15,000 in actual expenses, bank statements assume $20,000 in expenses and qualify you on $20,000 income. A P&L shows your real $25,000 profit—you qualify for more house.
Most Belvedere buyers with straightforward businesses choose bank statements. Consultants, real estate agents, and solo contractors rarely need CPA involvement. Multi-partner firms, medical practices, and businesses with equipment depreciation usually benefit from P&L documentation.
Yes, but it restarts underwriting. Lenders need time to verify the CPA and review new documentation. Expect a two-week delay minimum.
Down payment depends on credit and property type, not documentation method. Most non-QM lenders want 15-20% down regardless of income verification path.
Rates are identical when credit and down payment match. Your documentation choice affects qualification, not pricing. Rate differences come from borrower profile, not paperwork type.
Lenders pick one income verification method per loan. You can't mix them. Choose the approach that shows your strongest qualifying income.
Most lenders allow 12 or 24 month options. Using 24 months smooths out seasonal dips. It won't erase a bad year, but it helps average out volatility.