“Two self-employed borrowers with identical deposit history can get very different qualifying income depending on which lender they work with.
Lender A applies a flat 50% expense ratio. $20K/month in business deposits becomes $10K/month in qualifying income.
Lender B uses a CPA-prepared P&L showing your actual expense ratio is 35%. That same $20K becomes $13K/month — a $3K/month difference that can determine whether you qualify.
Personal deposit programs don't apply an expense ratio at all. $20K/month in personal deposits qualifies at $20K/month.
Most LOs only know one program. The right lender runs both scenarios and shows you which number is higher.
If you know a self-employed professional who's run into this, forward this their way — subscribe here: https://equityreport.beehiiv.com/
— Chad
PS: Your CPA can often prepare a P&L that improves the qualifying income calculation significantly. Worth asking before you start any application.