What is a P&L Mortgage?

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A Profit & Loss (P&L) Mortgage, often referred to within the context of self-employed or business owners seeking home loans, is a type of mortgage where the borrower’s income verification is based primarily on their profit and loss statement rather than traditional W-2 forms or tax returns. This approach is particularly beneficial for individuals who may not have a consistent income or for whom tax returns do not fully reflect their actual earnings due to various deductions and expenses. Lenders analyze the profit and loss statements, to assess the borrower’s income stability and ability to repay the loan. This type of mortgage allows for more flexibility in the underwriting process, making it easier for self-employed individuals and entrepreneurs to qualify for home financing by providing a more accurate picture of their financial health than may be shown from a tax return alone. #Mason&Mason PLLC #Realestate

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