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in Fairfield, CA
Self-employed borrowers in Fairfield can't always qualify with tax returns. These two non-QM loans solve that problem differently.
One uses your bank deposits as proof of income. The other uses a CPA-prepared profit and loss statement. Your business structure usually decides which fits better.
Bank statement loans use 12 to 24 months of deposits to calculate your income. Lenders apply an expense ratio to determine what counts as qualifying income.
Personal accounts and business accounts are treated differently. Business accounts typically have a higher expense ratio applied, which lowers your qualifying income.
P&L loans use a profit and loss statement prepared by a licensed CPA. Most lenders require just 12 months — sometimes only one year of business history.
Your CPA's numbers drive approval, not raw deposits. This can work well if your business shows strong net profit even with moderate revenue.
Bank statement loans need more paperwork — up to 24 months of records. P&L loans require less documentation but demand a licensed CPA's signature.
Income calculation differs sharply. Bank statement lenders apply expense ratios to deposits. P&L lenders use whatever net profit your CPA reports.
Rates on both are higher than conventional loans. But P&L loans sometimes price slightly higher due to thinner documentation. Rates vary by borrower profile and market conditions.
High-revenue businesses with lots of deposits usually do better with bank statement loans. Your actual deposits often produce a stronger income number than a P&L would.
If your business runs lean with strong net margins, a P&L loan can be the smarter move. Your CPA's reported profit may qualify you for more than raw deposits suggest.
Fairfield borrowers running cash-intensive trades or service businesses — contractors, consultants, retailers — should run both scenarios before committing.
No CPA is required for bank statement loans. You just need 12 to 24 months of personal or business bank statements.
Some lenders allow both. But most non-QM lenders pick one income method per loan file.
Both programs have similar credit thresholds. Most non-QM lenders want at least a 620 to 640 score for either option.
Lenders total your deposits then apply an expense ratio — often 50% for business accounts. That net figure becomes your qualifying income.
A loss disqualifies you for a P&L loan. Lenders need positive net income to calculate a debt-to-income ratio.
Yes. Non-QM lenders fund in Solano County. Property type and loan amount still affect program eligibility.