In the world of finance and economics, a letter of explanation is a formal letter to a financial institution that gives specific details regarding an incident or circumstance that is outside the normally accepted scope of business. In some circumstances, the letter of explanation is given directly to the major credit reporting bureaus to be given out with a person's credit report any time one is requested.Know More
A letter of explanation can be expected any time a prospective borrower is applying for a large sum of credit, such as a mortgage, and the lending institution recognizes the presence of defaulted or late payments on the purchaser's credit report. The purpose of the letter is to give specific details explaining the individual circumstances of the default and offers an opportunity to mitigate its impact on the applicant's chances for approval. A letter of explanation cannot be expected to salvage a history of bad credit but can offset the presence of a questionable section of history. The letter should use the standard business letter format, give specific details and be free of spelling and grammatical errors.
A letter of explanation is also the term used for a letter written by a job seeker to a prospective employer explaining the presence of a past criminal conviction.Learn More
To start a bank, choose your partners, pick the location of the bank, raise money, fill out a charter application, and submit the form for review. The amount of money needed is usually in the millions.Full Answer >
Examples of financial intermediaries include credit unions, financial advisers, insurance companies and mutual funds. A financial intermediary is a financial institution that helps a business or individual save or borrow money.Full Answer >
Mortgage lenders don't require that borrowers have life insurance, but they offer borrowers the option of purchasing mortgage life insurance. A mortgage life insurance policy names the mortgage lender as the borrower's beneficiary. If the borrower dies, the lender uses the insurance money to pay off the loan.Full Answer >
Historical interest rates are the past rates that were transacted for different interest-bearing investments. These investments include money market instruments, bonds, certificates of deposit, savings accounts, swaps and mortgages.Full Answer >