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in Colton, CA
Self-employed borrowers in Colton have two strong non-QM mortgage options. Bank Statement Loans and Profit & Loss Statement Loans both help entrepreneurs qualify without traditional W-2 income.
Each loan type uses different documents to verify your income. Understanding these differences helps you choose the best path for your Colton home purchase or refinance.
Both options serve San Bernardino County self-employed professionals. Your business structure and record-keeping style will determine which works better for you.
Bank Statement Loans use 12 to 24 months of personal or business bank statements to verify income. Lenders analyze deposits to calculate your qualifying income for the mortgage.
This option works well if you don't have CPA-prepared financial statements. Many self-employed borrowers find this the simpler documentation path.
You'll need consistent deposits showing adequate income flow. Rates vary by borrower profile and market conditions based on your specific financial picture.
Profit & Loss Statement Loans use CPA-prepared P&L statements to verify your self-employment income. This formal financial documentation approach mirrors traditional business lending.
You'll need a licensed CPA to prepare your profit and loss statement. This option suits borrowers who already maintain professional financial records for their business.
The CPA preparation adds a step but may result in stronger income documentation. Rates vary by borrower profile and market conditions depending on your qualifications.
The main difference lies in documentation requirements. Bank Statement Loans need your actual bank records while P&L Loans require professionally prepared financial statements.
Bank Statement Loans offer faster preparation since you just gather existing statements. P&L Loans require scheduling with your CPA and paying for professional preparation.
Cost differs too—bank statements are free to obtain while CPA services involve professional fees. Your existing business practices should guide your choice.
Choose Bank Statement Loans if you want simplicity and don't work with a CPA regularly. This path works great for newer self-employed borrowers or those with straightforward finances.
Choose P&L Statement Loans if you already have a CPA relationship and professional financials. Established businesses often find this aligns with their existing practices.
Both options serve Colton borrowers well. Consider your documentation availability, timeline needs, and how you currently manage your business finances.
Neither is inherently easier—qualification depends on your income documentation. Bank Statement Loans avoid CPA costs while P&L Loans may show stronger income for some businesses.
Most lenders require one method or the other, not both. Choose the documentation type that best represents your income and matches your business record-keeping.
Non-QM loans typically have higher rates than conventional loans. Rates vary by borrower profile and market conditions based on your credit and down payment.
Bank Statement Loans require 12 to 24 months of statements depending on the lender. More months of consistent income can strengthen your application.
Your CPA must be licensed and in good standing. They'll need to prepare the P&L statement following standard accounting practices for mortgage verification.