How do I complete a personal financial statement correctly with detailed instructions?

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“Question. I m not going to answer the question that i m going to answer. Answer. Today is how to complete the personal financial statement.

Correctly. This is a common because the personal financial statement is often completed incorrectly causing delays and even loan declines. So i m going to answer this in two videos. First video is going to show you how to complete the personal financial statement.

Correctly. Which will save you time and headache. The second video is going to show you how the bank will interpret your personal financial statement. Which will help you identify the strengths and weaknesses of your personal financial.

Statement and you ll be able to make some adjustments hopefully. Prior to submission of your personal financial. Statement. Personal.

Financial statements also called the pfs just the acronym for it okay. So couple quick things you only have one time to give your first impression. So let s do it right so. The personal financial statement is a personal document to reflect you and your spouse s financial situation not your businesses not any third parties your uncle s financial information.

Any money they re going to give you etcetera. It is to reflect you and your spouse. The form that we re going to go over today is called the sba form 4 13. This is issued by the sba and it is required if you are completing a sba loan and if you re not doing an sba loan.

It s a good form to know most banks use it anyway. And if you have one of their personal financial statements. You can typically just sign their form and then use this one instead okay. So let s get started up in the top right.

Here you are going to see expiration date. The first thing you want to make sure is that the form is current this one expires september. 2014. Below that you re going to see an as of date this is where you are going to put the date as all this informations is based on i suggest let s pretend today is july 15th.

So i would have you print off all of your documents your bank statements your credit card statements your mortgage statements your car loans every financial doubt your stock certain stock information all of those documents as of 6 30. So you want to do go back to the previous month and print off all your documents ending with the last day of the month. So i would put 6 30. Up here.

If it was 7 15. Today okay down towards the first third of the second third of the page you re going to see name this is for you and your spouse s name the rule is this if you file a tax return joint then both of those names are to be listed on the personal financial statement. Just because your spouse is listed does not mean that he or she is a guarantor on the loan. But it does represent that you two own assets.

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Together. Okay. Residents address is below that i recommend putting wherever you live currently that s usually your personal or primary residence. However it could be an apartment or you could be wherever you wherever you re living currently below that is business name and applicant name this is the only field that i recommend leaving blank because this may change depending on advice from your banker.

Your cpa other financial advisors. Your attorney cetera so leave that blade business phone and residence phone are on the right for business phone you have to consider that the banker is going to be calling these numbers. I would suggest you put your direct business line on that line. So that he doesn t have to worry about calling a secretary and explaining why he s calling you it s kind of uncomfortable for both parties.

So if you can put your direct number. There that s helpful for residents. Both i recommend putting your cell phone just to make the process that much faster can hold you then get documentation back and forth okay so the personal financial statement. This is a summary of your assets and liabilities and net worth on the left is your assets on the right liabilities and net.

Worth top of the assets is cash on hand in banks and in banks. This is where you are going to put your personal checking and while checking accounts. So this is going to be your individual accounts. Your joint accounts and your spouse s accounts.

The total amount will be listed in this top body next is savings accounts. This is where you are going to list all your savings accounts money market accounts and cds that total balance will be listed in the second line ira and retirement accounts is the third line on here that is where you re going to list all your retirement accounts. Your roth iras your iras your 401k is excetera. So that goes on the third line and those will be described on the second page in detail next is accounts and notes receivable.

This is if you loan anyone money personally and they went back to you that s where you re going to is that it s fairly uncommon to see these there. But it does happen from time to time next is life insurance cash. Surrender. Value.

Only if you have a term life insurance policy. And that s all you have for life insurance. This does not apply you do not have a cash value with the term life insurance policy. However.

If you have a whole life or variable life or some other specialties life insurance program. You may have a savings account component of the life insurance policy and you want to list that that amount here again you want to look at let s say. The six thirty statement and on that statement. It s going to list what that value is and you re going to put that there next is stocks and bonds.

This is the total of all of your marketable securities remember this is for you your spouse and joint so all your marketable securities will go there and a full description of what those are will be detailed on the second page of this form next up is real estate real estate is going to include all of your your personal residents. Your second residence your mountain home your shore own any commercial property that you personally own not held in a business. So anything any real estate that you own and your personal name and that you would list on your personal tax return so you put the total there next up is automobiles. This is going to be again you and your spouse s cars your four wheelers your boats.

All that kind of stuff is going to go under autos alright. Other personal property. This is going to be your assets at your house. Typically your tools your artwork your electronics your furniture your antiques all of that kind of stuff you re going to total all that out your estimate.

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There and put that on other personal property now other assets is the last section and this is really to cover you know any other assets that you hold including your interests in your businesses. That you may. Own so let s say you own a. Business that is worth 500000.

That s what the total assets are now the business has a hundred thousand dollars in debt so the net worth is assets minus liabilities so five hundred minus 100 leaves four hundred thousand in true value than if you were to sell business and pay off the debt you have four hundred thousand dollars. You can put that four hundred thousand in other assets right here. Okay next up you just want to total all these assets. Together and put the total in total assets at the bottom there okay good job on the liabilities accounts payable accounts payable is like on the personal side is like cash on delivery it s fairly moral in common than accounts receivable on the personal side accounts.

Payable is let s say you bought. Something. And you re going to pay for when you got back or when you receive it or it s someone gave you your cult gave you a car and you need to pay for the car or something like that notes payable to banks and others that s all in your credit cards your personal lines of credit. All that the bank lines a credit debt is going to go here.

So you re going to get the total amount that that total balance and in the second line. There okay third up is an installment accounts for your autos. So this is where you re going to total up all of your auto loans and on your credit bureau. It s going to list usually lists autumn next to those debts.

So you want to list those whether it s a boat loan and airplane load on a car loan all of those will entitled auto on your credit bureau. So you want to put the total balance right there as well as what the total monthly payment is for all those combined you re going to detail this out on the second page next isn t installment accounts other this is probably going to be student loans or other personal loans. That you have that are payable for more than what you knew and you are going to detail the total balance and what that monthly payment is the total monthly payment for those installment loans okay next up is life insurance for life insurance you want to list if you have any loans against your life insurance sometimes you ll do that you ll take a loan out on the cash. Surrender.

Value. Just you know to make ends meet sometime. And then you ll pay that back if you have taken a loan on your life insurance policy you want to detail that here okay next up is mortgage on real estate. This is where you are going to total up all of your mortgages and put the put the total debt here unpaid taxes.

If you owe any real estate. Taxes. Income taxes school taxes all that kind of stuff you re going to put it that amount here one thing as we go through liabilities. It s really helpful if you have also pulled your credit bureau.

It s very common to receive a personal financial statement that looks very different than the credit bureau. Mainly most people do not put the total balances of their credit cards on there so make sure that that you compare excuse me your credit bureau with your personal assets to make sure you ve caught everything okay other liabilities. This is the catch all if there are any other liabilities out there you want to make sure you get those catheters get those on there okay next up you are going to total all the liabilities up and put the total right here following that you are going to do your net worth which is assets minus liabilities is your net worth that s on this second line here lastly is your total that is going to be your liabilities. Plus your net worth and that amount listed here should equal this amount it should all back up if it does not there s there s an issue with the adding so make sure you check that okay now we are down to the section.

Where we are going to be detailing some of these assets out sources of income salary. This is going to be right over here all of your wage income for you and your spouse put the total wage in home that you put w2 1099 that s going to be listed right here net investment income is next that is where you are going to put all your dividend and interest income. You re going to list all right here third is real state income if you have any rental properties usually put on your schedule ii that is where you are going to list your net operating income here so after expenses. What is the amount that you take home that goes on the third line here and then last is other income.

If you have any other sorts of income if you want to add in child support income or something like that you can put that in the fourth line. There so that should cover all of your sources of income that would be reported on your tax return on the right hand side are your contingent liabilities so have you co signed any co sign for your son or daughter for a car loan have you done anything where you could be potentially liable for those those payments. So put your co sign things here next legal claims and judgments. This is where you re going to put any potential lawsuits that you re in and any judgments.

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These will show up on internet searches as well as your credit bureau. So make sure that you re checking your credit bureau again to make so that everything reflects itself. And there are no surprises to the lender lenders don t like surprises okay provision for federal income tax. If if you re expecting federal income taxes you can put that here then other special debt.

This is another catch all to any other debts that you re expecting there at the bottom here you re going to describe your other income. Okay. We are on the page. Okay at the top of the form is notes payable to banks.

And others. This is this is where you put the total of all your credit cards and accounts payable so credit cards stooop your personal loans. All of those your total was on the front page. You are now going to detail those out.

If you have more than five credit cards. You re going to want to attach another spreadsheet or a piece of paper detailing what all those are you re going to want to put a name and addresses of note holder. You definitely want to put at least the bank name. If you have let s say you with chase credit card or you have two of those you are going to want to put the last four at least of the credit card.

Number. After that the address is not so important. But you do definitely want to identify the bank name and some account number so that the banker can easily match. It up to your credit bureau.

So list all those out original balance for credit cards you want to put your limit. So. What is the max amount that you can put the credit card on spend on the credit card. That s the amount that you want to put in original balance current balance.

Obviously is your current balance as of the end of last month payment about this is your minimum monthly payment if you pay much more than the minimum don t put that put what the minimum amount is and then frequency that is most often monthly. Very few account going to be different than monthly and then how secure most credit cards are unsecured unless you have some secured credit cards or they ve taken some sort of collateral. But most are unsecured so you can write that there okay. But the total amount for your balance or current balance rather should match up to page one all right section three stocks and bonds this is all your marketable securities so this gives you space for for marketable securities.

You are going to list those in there number of shares name of securities cost market value data quotation and total value usually your market value that will be listed on your statement will be the same as your total value okay and then date of quotation. If it happens to be six thirty that you can print your statement out put that there all right and again the total value here should match up to page warm. Everything should foot next up is real estate personal real estate under property a this is where you re going to put your primary residence. And there s enough space for you to identify a first and second loan.

If if you have on second loan or home equity line of credit. It will go all under each one of these properties okay type of property this is going to be your primary your secondary rental property commercial property that you own personally that s what your input here next is address. Please detail. It clearly what the address is including steady city state and zip date purchase when you purchased it what you originally paid for we don t care so much about the how much you ve invested in the new kitchen.

You want to know really what on the original day. What did you pay for the property present market value that s going to be what it s if you have a recent appraisal. Put the appraised. Praise value there or call a broker and they can give you it a good idea.

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What that what the current value is or you can even just type in the address into a search engine such as google and usually it will give you a couple values right up at the top because other websites provide that information so put put some number there that s fairly accurate do not go high do not go low try to make it as accurate as possible name an address of mortgage holder. This again. We really care about the the bank name much more than the address we want to match it up to the credit bureau. So please at least put the bank name and if you have numerous mortgages for the same bank.

List. The account numbers there so next spot is where you can put the account number to help us identify. Which mortgage you re talking about the mortgage balance. You d be on a payment per month.

Again this should be per month and then the status of the mortgage. This is going to be looking for current written. If it s late that may be an issue later on but so fill this out for each one of the properties. If you owe more than three properties.

Personally you re going to attach a schedule of real estate. Which will identify the same information. And just for all of your properties. Okay section five other personal property and other assets.

This is where you are going to detail about five of the fields from the front page including retirement accounts your personal assets. It can your your electronics your cars. All that kind of information you re going to detail here in this section and give as much information as you can on your car. Let us know you know the the model number or model and brand.

So that s all listed here section six unpaid taxes. If you owe any taxes that you mentioned on the front page list. The information here and then other liabilities. If there are any other liabilities that we couldn t identify on the front page put that here okay.

That s it for page two all right section eight section eight is for life insurance. This is where you are going to list all of your lines life insurance term whole life variable. It s all going to be listed here make sure that you give us the face value. Which is the amount that will be paid your beneficiaries.

If something was to happen to you as well as the cash surrender value. If you have the whole life cetera. The name of the insurance company again as much information as you can and if this can be pulled from the most recent bank statement that our insurance statement that d be helpful okay we re almost done lastly you are going you and your wife or spouse are going to sign this make sure you put your name date. And do not forget to put social security number so throughout this process.

I ve recommended that you print out all of your financial statements on the asset side on the liability side so that you clearly know what these amounts are and once you have completed inside this i recommend that you print this off put it in a binder with all the supporting documents as the banker will most likely request some of this information to back up the documents on here do not list anything on here that cannot be easily backed up except for personal assets. So the the cash in the bank. The credit cards the mortgages all that should be easy the stocks should be easily backed up with your financial statements. Thank you very much and i hope this was helpful and i ll see you in the next video about how the bank will interpret your print.

Personal financial statement. Thank you ” ..

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