One Size Does Not Fit All

Just as a suit isn’t “one size fits all”, the mortgage loan process is not going to be exactly the same for everyone who applies.  Some people have had events or circumstances in life that have tarnished their credit.  It is not uncommon for a mortgage lender to request a letter of explanation to describe these events or circumstances when they are less cut and dry.  Letters of explanation move with the file from processing to underwriting and then to investor and help paint a picture of your exact situation so there is no wondering what the circumstance might be.  It is all documented.  When your mortgage lender does ask you for a letter of explanation or additional documentation, it is always in an effort to assist you in polishing up the credit situation and making it as clear as possible for those working on the file to understand.

What to Expect:

·         If you receive a request to write a letter of explanation, make sure that you understand, completely, what you are being asked to explain. 

·         Be as specific as possible while providing a straightforward explanation.  Include timelines with dates.  Explain what happened; why it happened; and how your situation has changed or how you have re-established your credit history.

·         Provide all supporting documentation.  You may be asked to provide evidence that supports your circumstance, such as tax returns, letters from employers, copies of death certificates or divorce paperwork, to name a few.

·         Don’t forget to sign and date your letter!  As foolish as this may sound, many letters are rejected because they are not signed.