credit report letter of explanation
credit report letter of explanation
Does anyone have a sample explanation letter for items on a credit report? Mortgage lender is asking for?
As a former owner of a mortgage company:
This is a personal letter, not one from the bureaus. You should explain as simply and clearly as possible why you didn’t pay your bills or why the specific items in question were late, etc.
For example, if you were laid off, you would write a simple letter saying that such and such debts were late between this time period because I was laid off.
Talk to your mortgage broker about this and they will be able to tell you what specific debts during what time periods are being questioned by the underwriters.
This is a very simple, make sense kind of letter that someone in underwriting can say, “hey, that makes sense…this person went through a hard experience, but I know they will pay back this loan because they’ve moved on.”
If your mortgage broker can’t tell you details to this effect, find another lender as they likely don’t know what they are doing. Also, it is actually rare to get this kind of request unless your credit has some serious bumps in it. Be cautious that you are not going to be overcharged and the interest rate will be resonable. This type of request can come from good bankers, but also from sub-prime lenders who won’t give you great terms.
You may have to take what they give you, just make sure you are comfortable with the payments today – and what the payments could be under the highest adjustment when that happens. If I’m reading your question right, you’re likely to have an adjustable loan after 2 or 3 years.
