What do underwriters do with letters of explanation?

A Letter of Explanation (or LOE) is commonly requested by a mortgage lender or underwriter to get specific information from the borrower and complete the loan application process.

How long does it take to get final approval from underwriter?

Mortgage lenders have different ‘turn times’ – the time it takes from your loan being submitted for underwriting review to the final decision. The full mortgage loan process often takes between 30 and 45 days from underwriting to closing.

What happens during final approval from underwriter?

Loan funding: The “final” final approval This means the lender has reviewed your signed documents, re-pulled your credit, and made sure nothing changed since the underwriter’s last review of your loan file. When the loan funds, you can get the keys and enjoy your new home.

What is an explanation letter?

A letter of explanation is a brief document you can use to explain anything in your financial or employment documents that might make an underwriter pause. For example, you may need to write a letter of explanation if you have unusual or sudden activity in your credit report or banking statements.

How do I write a letter of explanation for an underwriter?

How to write a letter of explanation

1. The lender’s name and address.
2. Your name and your application number.
3. The date you’re submitting the letter and expected closing date (if you know it)
4. A short statement that helps an underwriter fully understand your situation in regards to the reason for concern.

Do underwriters accept letters of explanation?

A letter of explanation is your chance to answer any questions a lender might have about your loan application. Underwriters are often required to get letters of explanation for certain application-related issues.

What happens after letter of explanation?

Once you’ve submitted a letter of explanation, you’ll have to wait to hear from your lender. Make sure you respond to any additional inquiries quickly. Lenders appreciate borrowers who treat the homebuying process with the importance it deserves.

Is a letter of explanation bad?

When you are using a mortgage to pay for a home, your lender will sometimes have concerns about your application details. The lender can raise these concerns in the form of a letter of explanation request. Getting a letter of explanation request isn’t a bad thing, as long as you can provide sufficient reasoning.