A letter of explanation for a mortgage underwriter should explain delinquencies on a person's credit report, how they happened and the steps being taken to ensure they do not occur in the future. Often, a mortgage underwriter will request a letter of explanation in order to validate his or her reasons for approving or denying the loan.
A letter of explanation is helpful in pleading one's case to a mortgage underwriter. It may be the one piece of information that swings the decision from a "no" to a "yes."
Step 1: Do the research
Take the time to pull a personal credit report. Review it carefully and note any blemishes or dings.
Step 2: Gather supporting documentation
Supporting documentation helps prove one's case. For example, if delinquencies were due to a hospitalization, make copies of the hospital bill showing the inpatient dates.
Step 3: Write the letter
The letter should be professional and to the point. Use bullet points to enumerate the credit blemishes that are addressed in the letter. Give the reason for each delinquency and an explanation of how it will be avoided in the future. The letter should be contrite and reassuring, not flippant or casual. The goal is to assure the underwriter that the applicant is a good risk for the loan.