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in Auburn, CA
Both bank statement and P&L loans solve the same problem: getting self-employed Auburn borrowers approved without W-2s. The difference comes down to how you prove income and which documentation you already have ready.
Most self-employed buyers qualify faster with bank statements since you already have them. P&L loans require a CPA-prepared statement, which adds time and cost but can show higher income in some cases.
Bank statement loans use 12 or 24 months of personal or business bank statements to calculate your income. Lenders average your monthly deposits and apply a percentage based on your business type.
You typically need 10-20% down, credit scores above 620, and consistent deposits showing your business generates steady income. No CPA involvement required, which speeds up the process significantly.
P&L loans require a certified profit and loss statement prepared by a licensed CPA covering 12-24 months. The CPA certifies your business income, which becomes your qualifying income for the mortgage.
These loans need the same credit and down payment as bank statement loans. The advantage: a well-prepared P&L can show higher income than raw bank deposits, especially if you have business expenses.
Speed separates these options. Bank statement loans close in 21-30 days since you already have your statements. P&L loans add 2-4 weeks while your CPA prepares the documentation.
Income calculation differs too. Bank statements use gross deposits minus typical business expense percentages. P&L loans use net profit after all expenses, which can work better or worse depending on your write-offs.
Choose bank statements if you need speed and your deposits clearly show consistent income. Most Auburn contractors, real estate agents, and small business owners close faster this route.
Go with P&L if you write off heavy expenses that make your bank deposits look low. Also better for complex business structures like partnerships or S-corps where deposits don't tell the full story.
Yes, but it restarts underwriting and adds 2-3 weeks. Choose your documentation path before applying to avoid delays.
Rates are nearly identical since both are Non-QM products. Your credit score and down payment affect rates more than documentation type.
The CPA must be licensed and independent. If you don't have one, factor in time to find and hire a qualified accountant.
No, lenders require one income documentation method per application. Pick the one that shows your strongest qualifying income.
Bank statements over 24 months smooth out seasonal fluctuations better. P&L annual snapshots may show lower average income for seasonal work.