Question 1

How far back does my P&L statement need to go?

Accepted Answer

Most lenders want 12-24 months of profit and loss data. Your CPA prepares the statement from your business books and signs a letter verifying accuracy.

Question 2

Can I use my own P&L or does a CPA have to prepare it?

Accepted Answer

You need a licensed CPA to prepare and sign the P&L statement. Lenders verify the CPA license directly. Self-prepared statements don't meet underwriting requirements.

Question 3

What if my P&L shows a loss in one of the two years?

Accepted Answer

One loss year usually kills approval. Some lenders average the two years if the loss is small and the other year shows strong profit. Most want two profitable years.

Question 4

Are P&L loans better than bank statement loans for self-employed borrowers?

Accepted Answer

Bank statement loans usually produce higher qualifying income because they capture all deposits. I run both scenarios to find which gets you approved for more house.

Question 5

How much higher are P&L loan rates compared to conventional mortgages?

Accepted Answer

Expect rates 1-2% higher than conventional loans. Rates vary by borrower profile and market conditions. Stronger credit and larger down payments reduce the rate premium.

P&L Statement Loans in Palm Desert: Income Verification Built for Self-Employed Borrowers