Key takeaways. A letter of explanation for a mortgage is a document that addresses red flags that might derail a mortgage approval, such as a period of unemployment or an unpaid credit balance.

Mortgage gift letter template Confirm with your lender all the information it needs your donor to include in their letter. When your donor writes their letter, it should look similar to this: ...

If a lender asks you to submit a letter of explanation, think of it as a requirement, not an option. Your response could make the difference between being granted or refused a mortgage .

A letter of explanation should tell the lender why an event happened and describe steps you’ve taken to solve or recover from the issue, if applicable. Not every borrower needs to write a letter ...

If your credit report has any negative history, a lender may require a letter of explanation for a mortgage application. Needing a letter of explanation isn't a cause for panic, but it's something ...

A letter of explanation makes getting approved for a mortgage more cumbersome, but it's a positive sign. When a lender requests a letter of explanation, it is giving you the opportunity to share ...

In a letter of explanation for your mortgage application, you may need to account for any late payments, collection accounts, judgments or bankruptcies on your credit history.

Sample Letter of Explanation If your lender asks for a letter of explanation, you’ll want to state what the issue is and, if needed, describe how it was resolved. You won’t need to write a ...