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in Fort Bragg, CA
Fort Bragg self-employed borrowers have two main non-QM options when tax returns don't show enough income. Bank statement loans use deposit history. P&L loans use accountant-prepared financials.
Both bypass traditional W-2 verification. Your choice depends on how you manage money and which documents tell the better income story.
Bank statement loans analyze 12 or 24 months of business or personal bank deposits. Lenders calculate monthly income from average deposits, typically using 50-75% of gross deposits as qualifying income.
This works well if you run money through your accounts but write off most income on taxes. Clean, consistent deposits strengthen your application. Rates vary by borrower profile and market conditions.
P&L statement loans require a CPA or licensed accountant to prepare your profit and loss statement. Most lenders want year-to-date P&L plus one or two prior years, along with a business license.
This approach lets an accountant present your income story more strategically than raw bank deposits. Works well if your deposits are irregular or you keep minimal cash in business accounts.
Bank statement loans are faster since you provide statements directly. P&L loans take longer because accountants must prepare documents, but they often show higher qualifying income if your deposits don't reflect true earnings.
Bank statement loans cost less upfront—no CPA fees. P&L loans require professional preparation, adding $500-2000 to closing costs. Credit and down payment requirements are similar for both, typically 620+ score and 10-20% down.
Choose bank statements if you run consistent deposits through accounts and want quick approval. This works for contractors, Airbnb hosts, and cash-heavy businesses where deposits tell the income story clearly.
Choose P&L if deposits look messy, you move money between accounts frequently, or you keep cash reserves outside the bank. Also better if you recently increased income—accountants can highlight current earnings versus historical averages.
Yes, bank statement loans accept personal accounts, business accounts, or both. Lenders prefer business accounts when available but many self-employed borrowers qualify using personal accounts alone.
No, it must be prepared by a licensed CPA or accountant, but full audits aren't required. A compiled or reviewed P&L with accountant signature works for most lenders.
Rates are similar for both programs, typically 1-3% higher than conventional loans. Your rate depends more on credit score, down payment, and property type than which income documentation you choose.
Most lenders require 12 months minimum. Some accept 24 months, which can smooth out seasonal income fluctuations common in Mendocino County tourism-related businesses.
Yes, but it restarts underwriting since documentation changes completely. Better to choose upfront by reviewing both options with your broker before submitting.