|
|
| |
letter of explanation: Reader Questions | The Consumer Explanation Letter
- 05/06/15 11:29 PM
I’ve received several questions from readers just this week on one mortgage document: the consumer explanation letter. Most of them are just plain annoyed with having to complete this document and don’t understand how to complete it.
The consumer explanation letter prints at the end of your credit report and has five different sections: derogatory accounts, public records, addresses, inquiries, and name variations. Each of these sections contains items from your credit history for which the mortgage lender requires an explanation.
Derogatory AccountsIf you have any late payments or collections, they will show in this section. The document asks you for an explanation and an outcome … (1 comments)
|
letter of explanation: Overdrafts on Your Bank Statements Are Like Pimples on Prom Night
- 09/04/14 06:47 AM
You’ve decided you are ready to buy a house, you have contacted a Realtor to get the online search process started, and just one thing stands in your way from beginning the physical house hunt: the mortgage pre-approval.
You have probably been introduced to a lender by your Realtor, you have filled out the online application, and now the lender wants you to hand over documentation to verify your income and assets, including your bank statements, before he or she will issue a pre-approval letter.
You immediately think back to that time last month when you wrote a check and it was cashed … (21 comments)
|
letter of explanation: Qualifying for a Loan When You’ve Only Been Self-Employed for One Year
- 05/21/14 04:07 AM
Picture Source
In general, a self-employed borrower must have been self-employed for a minimum of two years in order to use that income to qualify for a mortgage loan. A loan officer will request tax returns for the most recent two years and a year to date profit and loss statement to calculate qualifying income.
FHA does allow for an exception to the two year rule if the borrower meets the following requirement: The borrower must be self-employed between one and two years and can document “previous successful employment in the line of work in which the individual is self employed, or in a related occupation. A combination … (3 comments)
|
letter of explanation: Sourcing a Deposit
- 04/29/14 05:34 AM
Has the Underwriter Asked You To Source a Deposit? One of my most recent clients who bought a home in Richmond VA was self-employed. Because of the nature of her business, she made several large deposits into her bank accounts throughout the month. The deposits were payments from clients. Since they were large and not payroll, the underwriter requested that she “source” the deposits.
What Does “Sourcing” Mean? In the mortgage industry, “sourcing” simply means to explain where funds came from (usually with a letter of explanation) and provide documentation to support the explanation. Here are a few examples of deposits you may need to source:
Money from the sale of … (12 comments)
|
letter of explanation: The Dreaded LOX
- 04/01/14 11:26 AM
Has one of your clients been asked by his or her lender to write a letter of explanation or LOX? This underwriter requirment is very common in the world of home financing today, and I find that it has a tendency to stump some borrowers and stall the loan process.
Reasons for a Letter of Explanation
There are so many reasons why an underwriter may request a letter of explanation. Here are the most common ones I run across:
Overdraft on a bank statement Employment gap Bank deposits other than payroll Reasons for a bankruptcy Reasons for lates on revolving or installment … (9 comments)
|
|
|
|
|
|
|
|
I’ve received several questions from readers just this week on one mortgage document: the consumer explanation letter. Most of them are just plain annoyed with having to complete this document and don’t understand how to complete it.
;)
;)
