How do you write a letter of explanation to support stated income?

First, if you are self employed get a copy of the business license and submit that with your letter of explanation. The first question that I have for you is, is this for a home loan? If so, then you will need to explain your income for 2006-2007 explaining what your gross monthly income is.

If this is for a home loan, and you decide to go with a Full Documentation Loan Program you also have the choice to submit your bank statements (personal or business) that show your monthly deposits. This can be used as full documentation showing your monthly income. Hopefuly, this helps.

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