P&L/CPA Letter Loans In San Diego

Verify your income for a mortgage through a P&L statement or CPA-prepared letter, rather than traditional documentation. If your tax return doesn’t accurately reflect your true income, these loan types could be for you.

P&L Statement Loans in San Diego

• You’ll provide the YTD (year-to-date) as well as between 12 and 24 months prior.
• Lenders can review your gross revenue, expenses, and more.
• Your mortgage is underwritten according to cash flow in the P&L rather than net taxable income.

CPA Letter Mortgage Loans

• Otherwise known as a ‘comfort letter’, a CPA (Certified Public Accountant) will verify your financial stability and income.
• The letter may contain details about your business ownership percentage, the length of time you’ve been in the business, verified income, and confirmation that withdrawing a potential sum for a down payment will not impact the business negatively.

Things to Consider for P&L/CPA Letter Home Loans

• Make sure your operational costs are under control, as this is something lenders will review.
• Lenders will typically ask for YTD P&Ls (within the last 60 days) and statements from one or two years prior.
• Underwriters look for revenue consistency and steady growth, as well as seasonal fluctuations that could cause problems.
• CPAs only deliver facts rather than guarantees or opinions. They don’t predict future performance, only report on what has already happened.
• Red flags for lenders include mismatched figures, unexplained income drops, and confusion between personal and business expenses.
• You might experience higher down payment requirements, a requirement for three to six months of cash reserves, and higher interest rates compared to government-backed loans.