topic Letter of Explanation - Help! in Mortgage Loans

Letter of Explanation - Help!

Prayerfuln09 — Tue, 04 Oct 2016 18:28:43 GMT

Just heard back from our loan processor, and not surprisingly, the UW has conditions for us before we can get approved. Surprisingly, for me she wants a letter of explanation for two of my former addresses. She also wants a letter of explanation for a second job I held from 2014-2016.

My question is...what sort of information am I supposed to include in these letters? I assumed that I'd need to explain some dings on my credit report from the past, or something on my bank statement, which is why I was surprised about what was actually requested.

Would simply saying, "I lived at 123 Main Street from 2009-2012 and 456 Main Road NE from 2012-2013" and "I was employed as a Manager at ABC Company from December 2014-February 2016 (include phone number for company)" be sufficient? Or do I need to explain why I lived in these places and why I worked a second job, and give the whole back story? To be honest, I'd only planned on working the second job for 90 days and then was going to quit my first job. But I was able to manage juggling both jobs, and used the extra money to pay debt and raise my credit score over 100 points.

I'm just not sure how much explaining I need to do, and I want to get this back to the UW since we're scheduled to close next Friday!!

Re: Letter of Explanation - Help!

Anonymous — Tue, 04 Oct 2016 18:48:15 GMT

I freaked about letters of explanation as well and from what I gathered they want short and honest. Do not include to much extra information as it can cause a domino effect in which they ask for another letter of explanation based on the previous LOX.

Re: Letter of Explanation - Help!

Prayerfuln09 — Tue, 04 Oct 2016 19:11:01 GMT

@Anonymous wrote:
I freaked about letters of explanation as well and from what I gathered they want short and honest. Do not include to much extra information as it can cause a domino effect in which they ask for another letter of explanation based on the previous LOX.

Good point! The employment explanation could really open a can of worms

Re: Letter of Explanation - Help!

Sbrooks1 — Tue, 04 Oct 2016 22:41:48 GMT

How many addresses were in your report?

Re: Letter of Explanation - Help!

Prayerfuln09 — Tue, 04 Oct 2016 23:59:07 GMT

@Sbrooks1 wrote:
How many addresses were in your report?

2 previous addresses

Re: Letter of Explanation - Help!

Sbrooks1 — Wed, 05 Oct 2016 00:06:34 GMT

Oh wow! I may need to do something because I have 7 old addresses in EQ! What does the rest of your report look like and how long at current? I've lived at this current address for 7 years ! How scary that even that impacts our chances at a home loan

Re: Letter of Explanation - Help!

kats_rebuild — Wed, 05 Oct 2016 00:14:38 GMT

So I also had about 5 previous addresses that I had to explain. My loan officer gave me a letter of explanation form and it was literally a sentece for each address. For example I would say something like, "this was my dorm from 2005-2006," or "this was my address from x to x. I rented this property."

It was really simple and painless.

Re: Letter of Explanation - Help!

Sbrooks1 — Wed, 05 Oct 2016 00:21:10 GMT

I just worry because I did move around a lot until 7 yrs ago

Re: Letter of Explanation - Help!

Prayerfuln09 — Wed, 05 Oct 2016 02:27:48 GMT

@Sbrooks1 wrote:
Oh wow! I may need to do something because I have 7 old addresses in EQ! What does the rest of your report look like and how long at current? I've lived at this current address for 7 years ! How scary that even that impacts our chances at a home loan

The UW didn't ask any other questions about my report (I have two late payments but that was exactly one year ago - Oct 2015). I've been at my current address for 3 1/2 years. If you've been at your current address for 7 years, you may not have anything to worry about! Maybe this lender checks if it's been less than 5 years at the current address or something. Hope everything works out for you!

Re: Letter of Explanation - Help!

Prayerfuln09 — Wed, 05 Oct 2016 02:28:26 GMT

@kats_rebuild wrote:
So I also had about 5 previous addresses that I had to explain. My loan officer gave me a letter of explanation form and it was literally a sentece for each address. For example I would say something like, "this was my dorm from 2005-2006," or "this was my address from x to x. I rented this property."

It was really simple and painless.

Good to know. Thanks for sharing!

Re: Letter of Explanation - Help!

driftless — Wed, 05 Oct 2016 02:33:16 GMT

Yes, short, to the point and honest. Do not overthink this.

Re: Letter of Explanation - Help!

Prayerfuln09 — Wed, 05 Oct 2016 03:27:59 GMT

@driftless wrote:
Yes, short, to the point and honest. Do not overthink this.

Overthinking should be my middle name haha

Thanks for your help (and for the reminder to snap out of it)!