LAW REVIEW: What do you need when you apply for a loan? - KTIV News 4 Sioux City IA: News, Weather and Sports

LAW REVIEW: What do you need when you apply for a loan?

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UNDATED (KTIV) - If you've ever gotten a loan, you know there are a few things you need to keep in mind.

Matt Breen asked, "Jessie of Mapleton, Iowa asks, 'I am going to get a loan, what do I need to know?'" Jeana Goosmann, Goosmann Law Firm said, "Start by going to your local bank. There are two kinds of loans: personal and commercial. You'll have to allow time for the loan to be approved. You can also go to a family member for a loan."

Matt Breen asked, "What paperwork should they be prepared to provide?" Jeana Goosmann, Goosmann Law Firm said, "You should have a copy of your most recent income taxes returns. The bank will ask for a "personal financial statement." Be prepared to provide a proof of your income. That will also allow the bank to determine your ability to pay back the loan, and if you have collateral."

Matt Breen asked, "What documents will you be asked to sign?" Jeana Goosmann, Goosmann Law Firm said, "You will be asked to sign a promissory note, disclosure forms, a security agreement, and documents to prove you have collateral."

Matt Breen asked, "Can you explain the difference between a promissory note and a mortgage?" Jeana Goosmann, Goosmann Law Firm said, "A promissory note is a promise to pay what you owe. In a mortgage, it's all about the land pledged."

Matt Breen asked, "Earlier, you mentioned a security agreement. What's that?" Jeana Goosmann, Goosmann Law Firm said, "It covers property without a title or a deed."

Matt Breen asked, "What is a personal guarantee?" Jeana Goosmann, Goosmann Law Firm said, "It means that you're on the hook. You promised to pa, so watch out. You're personally obligated to pay."

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