Basic Bond Application Details

A bond is actually a debt security. It is basically, a formal contract to repay borrowed money, with interest of course, and at fixed intervals. So, in effect, a bond is similar to a loan. They supply a borrower with outside funds, which can then be used for long-term investments. Credit institutions generally issue bonds, and the most common process is through underwriting. Large financial institutions go through an underwriting process to assess the eligibility of a consumer in receiving their services.

The time needed for processing and completion of this process, really depends on the type of bond or loan you apply for. Also, different kinds of loans will necessitate presenting different types of paperwork. The paperwork for bonds and loans can be mind-boggling, but there are some basic documents which you know will be required, before processing an application.

Verification of your income is a main concern. To do that, you will have to supply earning statements. This might be W-2 forms, pay stubs and tax returns. For those who are self-employed, plan to present profit and loss statements and tax returns. If you have additional income, for example commissions, social security, bonuses, interest and such, you will need that documentation available as well.

Bank and savings account numbers, as well as bank statements, should be supplied. Also, have information on your savings bonds, stocks and investments. Moreover, do not forget copies of titles to any vehicles that are paid in full. You will also be required to supply a copy of a ratified purchase contract for the property in question, as well as a copy of the cancelled check used for the down payment

Bring records of your debts, too. Credit card bills, car loans, furniture loans, student loans, and other installment loans should be presented, along with creditor contacts. Also, if child support or alimony are involved, bring those records, as well.

You have to verify your credit history. You do this by supplying the lender with canceled checks for rent, utilities and other recurring commitments. This not only shows the amount of your revolving debt, but also your payment history.

When all the proper documentation is in place, the bond goes to a processor. Their job is to verify and validate all the information you supplied. Verification requests will be sent to your employers, mortgage holder, landlord, and lending institutions.

Securing a loan or bond will depend on your prior financial habits; in other words, your credit report. Lenders want to know what the risk factor is, before they step out on a limb and extend credit. Find out what is in your credit report prior to applying for a loan or bond.

Once you have been verified, all the information heads to the underwriter.

Susan Reynolds is a content coordinator a leading South African bond origination portal. For more information visit: http://www.bondcredit.co.za/