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in San Juan Capistrano, CA
Self-employed borrowers in San Juan Capistrano have two strong mortgage options. Both Bank Statement Loans and Profit & Loss Statement Loans help business owners qualify without traditional income verification.
These Non-QM loans serve entrepreneurs, freelancers, and small business owners in Orange County. Each option uses different documentation to prove your ability to repay. Understanding the differences helps you choose the right path for your home purchase or refinance.
Bank Statement Loans use 12 to 24 months of bank statements to verify income for self-employed borrowers. This Non-QM option lets you qualify based on actual deposits, not tax returns.
Lenders review your business or personal bank accounts to calculate monthly income. They typically average deposits over the statement period. This works well if you have consistent cash flow but write off significant business expenses.
Rates vary by borrower profile and market conditions. You'll need bank statements that show regular deposits and healthy account activity.
Profit & Loss Statement Loans use a CPA-prepared profit and loss statement to verify income for self-employed borrowers. This Non-QM mortgage requires professionally prepared financial documents.
A certified public accountant must prepare your P&L statement. Lenders use this document to assess your business income and expenses. This option works well if you already maintain detailed financial records with a CPA.
Rates vary by borrower profile and market conditions. You'll need a relationship with a CPA who can prepare compliant documentation.
The main difference lies in documentation requirements. Bank Statement Loans need personal or business bank statements. Profit & Loss Loans require professionally prepared financial statements from a CPA.
Cost and preparation time also differ. Bank statements are readily available from your financial institution. P&L statements require hiring a CPA and may take longer to prepare. Bank Statement Loans often provide faster processing.
Income calculation methods vary between the two options. Bank Statement Loans average deposits over time. P&L Loans use net profit figures from your financial statements. Your business structure may favor one approach over the other.
Choose Bank Statement Loans if you want faster processing and already have bank statements available. This option works well for borrowers who don't currently work with a CPA. It's ideal if your deposits clearly show strong income.
Choose Profit & Loss Statement Loans if you maintain detailed books with a CPA. This option may benefit borrowers with complex business structures. It's particularly useful if your bank deposits don't accurately reflect business profitability.
Consider your documentation availability and timeline. Bank Statement Loans typically close faster in San Juan Capistrano. However, P&L Loans may provide better terms if your financial statements show strong business performance.
Yes, lenders accept personal or business bank statements. Many self-employed borrowers use personal accounts where business income deposits. Both typically work for qualification purposes.
You need a certified public accountant to prepare the P&L statement. Bookkeepers and unlicensed professionals cannot provide acceptable documentation for these loans.
Rates vary by borrower profile and market conditions. Both loan types typically have similar rate ranges. Your credit score, down payment, and income documentation quality affect your rate most.
Bank Statement Loans often close faster since documents are readily available. P&L Loans may take longer if you need to have financial statements prepared. Plan accordingly based on your timeline.
Yes, you can often switch documentation types if needed. Your lender can help determine which option works best. Gather both types of documents early to keep options open.