Question 1

How recent does my P&L statement need to be?

Accepted Answer

Most lenders want a P&L dated within 90 days of application. Some accept 120 days. Your CPA prepares it specifically for the mortgage application using current business financials.

Question 2

Can I use P&L income if my business is an LLC or S-Corp?

Accepted Answer

Yes. The structure doesn't matter as long as you own at least 25% of the business. Your CPA prepares the P&L based on your ownership percentage of the company's profit.

Question 3

Do lenders verify the P&L directly with my accountant?

Accepted Answer

Always. The lender calls your CPA to confirm they prepared the statement and verify the numbers. Your accountant needs to be available and responsive during underwriting.

Question 4

What if my P&L shows a loss or break-even?

Accepted Answer

You won't qualify with that P&L. Lenders need consistent profit over 12-24 months. Consider bank statement loans instead, which show gross deposits rather than net profit.

Question 5

Can I combine P&L income with W-2 income from my spouse?

Accepted Answer

Yes. Many borrowers use P&L for self-employment income and traditional documentation for a spouse's W-2 income. This can improve your rate and terms.

P&L Statement Loans in Novato: Income Documentation for Self-Employed Borrowers