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Budget Letter of explanation

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Budget Letter of explanation

I would like an example of a mortgage budget letter. The under writer is asking for it.
Message 1 of 4
3 REPLIES 3
Moderator Emeritus

Re: Budget Letter of explanation


@Kimberly68 wrote:
I would like an example of a mortgage budget letter. The under writer is asking for it.

That's strange, what'd your LO suggest you write?  It would be reasonable to ask if you didn't get any guidance imo.

 

My theory would just do a quick monthly budget exercise and document the line items

 

Income: $XXXX

Mortgage Payment: -$YYYY

Gas: -$AAA

Grocers: -$BBB

Utilities: -$CCC

Car payment: -$DDD

<etc for major bits>

= monthly free cash flow.

 

Out of curiosity what was your DTI?

 




        
Message 2 of 4
Valued Contributor

Re: Budget Letter of explanation

UW can ask for these if DTI is very high (50%+). They want to know if you will soon be getting a raise, if you have additional income in the household that is not is not on the loan, any major expenses being eliminated soon, etc. Usually helps to explain if you have a clean housing/credit history as well. Your LO should help walk you through this.

Mortgage Loan Officer licensed in CA & AZ


Message 3 of 4
Regular Contributor

Re: Budget Letter of explanation

Our DTI is low very low actually but we moved to another state and I was initially going to keep my job but the rules changed so I found something local. I dropped 30k in income but I'm now 90% disable and work part time and the house isn't that much. I wrote a letter with our responsibilities and still had 1800 left over per month.
Message 4 of 4
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