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in Willits, CA
Self-employed borrowers in Willits face a choice most W-2 earners never see: how to prove income. Bank statement loans and P&L statement loans both skip tax returns, but they verify your earnings completely differently.
Your CPA relationship and how you run deposits determines which path works. One option pulls straight from your business accounts. The other requires formal financial statements from a licensed accountant.
Bank statement loans analyze 12 or 24 months of business or personal account deposits. Lenders calculate income by taking total deposits, removing transfers and returns, then averaging monthly cash flow.
You don't need a CPA or formal books. Pull statements from your bank portal, redact unrelated transactions, and submit. Most lenders accept both business and personal accounts if deposits show consistent income patterns.
Credit minimums typically start at 600. Down payments run 10-20% depending on your deposit consistency and credit profile. Rates price 0.5-1.5% above conventional mortgages.
P&L statement loans require a licensed CPA or EA to prepare your profit and loss statement. The accountant certifies your business income, expenses, and net profit over 12-24 months.
You need organized books and a professional relationship with your CPA. The statement must follow standard accounting practices and match your business structure. Solo accountants who just file your taxes typically qualify as preparers.
Credit requirements match bank statement loans at 600+. Down payments also run 10-20%. Rates often price slightly better than bank statement loans because CPAs validate the income calculation.
Bank statement loans look at gross deposits. P&L loans look at net profit after expenses. If you write off substantial business costs, bank statements show higher qualifying income because lenders ignore most expense categories.
The documentation burden flips between options. Bank statements need zero professional preparation but require explaining large or irregular deposits. P&L loans need CPA involvement but present clean, certified numbers that underwriters accept faster.
Processing timelines differ by two weeks typically. Bank statement reviews take longer because underwriters manually categorize deposits. P&L loans move quicker once your CPA delivers the statement.
Choose bank statement loans if you don't work with a CPA, have inconsistent expenses, or write off minimal business costs. This path works for contractors, online sellers, and service providers who deposit most earnings into one or two accounts.
Choose P&L loans if you already maintain books with a CPA, claim substantial deductions, or want the cleanest underwriting path. Real estate agents, consultants with major expenses, and established businesses with organized accounting fit this option better.
Many Willits self-employed borrowers qualify under both programs. We run calculations both ways during pre-approval to see which delivers better buying power for your specific income pattern.
Yes, most lenders accept either or both account types. They calculate income from wherever you consistently deposit business earnings.
Your accountant must hold an active CPA or Enrolled Agent license. Tax preparers without credentials don't qualify as statement preparers.
Bank statements typically show more income if you have minimal write-offs. P&L works better when expenses reduce your net profit significantly.
Yes, both programs cover the full range of Mendocino County home prices. Loan amounts go up to $3-4 million with proper qualifications.
Switching adds 2-3 weeks because underwriting restarts from scratch. We determine the best path before you go under contract.