How to write a letter of explanation You don’t need to worry if your lender requ

How to write a letter of explanation
You don’t need to worry if your lender requests a letter of explanation. These letters are a pretty standard part of mortgage applications.
Here are the important elements that your letter should include:
Facts. Include all the details with correct dates and dollar amounts.
Resolution. Explain how and when the situation was resolved.
Acknowledge. It’s important that the letter outline why the problem won’t arise again. Recognize if and how you could have avoided this mistake.
It’s recommended you type your letter on the computer. A handwritten letter is usually acceptable, but if your writing is difficult to read, you’ll only create more problems.
Ask someone to proofread your letter for clarity, grammar and spelling. You should include any documentation with your letter that speaks to your case.
Here’s a sample letter:
Your name
Current street address
City, state, zip
Re: Mortgage application (number)
Dear Mr. or Ms. (name of person requesting the letter of explanation),
This letter explains each of the items you asked about on my credit report.
1. Late payment to ABC Bank (car loan) dated 12/2018
I was laid off from my job in November and unable to make my $550 car payment in December because of the drain on my finances. I did recover quickly and started a new position two months later. At that time, I made up the back payment and its associated late fees.
2. Late rent payment to my landlord (Joe Smith) dated 12/2018
This payment of $1200 was also late due to my layoff in November, but three months later (on March 1, 2019) I had caught up with all my rent payments. I have started setting aside money each month into a savings account, so that I won’t be blindsided again by job loss and will be able to keep my bills current.
I fully understand the seriousness of taking on a mortgage and plan to make all my payments in full and on time. I sincerely hope you will approve my credit application.
(your signature)

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