Profit and Loss Mortgage Loan
A Profit and Loss (P&L) mortgage loan is a non-Qualified Mortgage (non-QM) designed for self-employed borrowers and business owners. It evaluates your ability to repay by using business financial statements rather than standard tax returns or W-2s, allowing you to bypass write-offs that artificially lower your qualifying income.
How It Works
- Alternative Documentation: Instead of tax returns, lenders use 12 to 24 months of Profit and Loss statements. These are typically generated through accounting software and must be prepared or audited by a licensed CPA or tax preparer.
- Income Calculation: Lenders calculate your qualifying monthly income by averaging the net profit shown on your P&L statements.
- Additional Requirements: To verify the P&L numbers, lenders usually require two to three months of business bank statements and may also ask for a CPA letter verifying how long you have owned the business.
I Make it Simple
Our interactive App helps guide you through the many parts of the home buying journey and your mortgage financing. The App helps keep you, your loan officer, and realtor connected and in sync with each other. It helps all of us work together to make the process smooth and easy.