What Is Letter Of Explanation And How You Should Write One?
A letter of explanation (LOE) is a document that provides a detailed explanation or clarification regarding certain circumstances or events. It is commonly used in various situations, such as applying for a loan, addressing discrepancies in financial records, explaining gaps in employment, or providing additional information for a visa application.
Writing an effective letter of explanation requires a clear and concise approach to ensure that the intended message is communicated accurately. In this article, we will discuss the key components and steps to help you write a compelling letter of explanation.
Understand the Purpose: Before you begin writing, it is crucial to understand the purpose of your letter of explanation. Identify the specific situation or event that requires clarification and determine the key points you need to address. This will help you maintain focus and structure your letter effectively.
Format and Structure: To ensure clarity and readability, follow a formal letter format. Include a professional salutation, such as “Dear [Recipient’s Name],” and use a respectful and polite tone throughout the letter. Divide your letter into paragraphs to address different points or circumstances, making it easier for the reader to follow.
Introduction: Start your letter with a brief and concise introduction. State the purpose of the letter and provide an overview of the situation you are addressing. Make sure to mention any relevant dates or reference numbers to help the recipient locate the associated documents or records easily.
Body of the Letter: The body of your letter should contain the detailed explanation or clarification of the circumstances. Be specific, honest, and provide sufficient information to address any concerns or questions that may arise. If necessary, provide supporting evidence or documentation to substantiate your claims. Break the body of the letter into paragraphs, each focusing on a different aspect or issue that requires explanation.
Tone and Language: Maintain a professional and respectful tone throughout the letter. Be mindful of your choice of words and avoid using overly emotional or defensive language. Instead, strive for a balanced and objective tone to convey your message effectively. Remember to proofread your letter for grammar and spelling errors to ensure clarity and professionalism.
Conclusion: In the concluding paragraph, summarize your main points and reiterate the purpose of the letter. Express your willingness to provide any further information or clarification if required. End the letter with a polite closing, such as “Sincerely” or “Yours faithfully,” followed by your full name and contact information.
Review and Revise: After writing the letter, take the time to review and revise it carefully. Ensure that the content is clear, logical, and coherent. Check for any factual errors or inconsistencies, and make necessary corrections. If possible, have someone else review your letter to get their perspective and suggestions for improvement.
Finalize and Submit: Once you are satisfied with the content and structure of your letter, prepare the final version. Print it on professional letterhead if applicable or convert it into a PDF for electronic submissions. Keep a copy for your records and submit the letter through the appropriate channel as instructed by the recipient.
A well-written letter of explanation can play a crucial role in clarifying circumstances, addressing concerns, and presenting a clear picture of your situation. By understanding the purpose, following a structured approach, maintaining a professional tone, and providing relevant information, you can effectively communicate your message and increase the chances of a positive outcome. Remember, transparency and honesty are key when writing a letter of explanation, so be thorough and truthful in your explanations
Frequently Asked Questions (FAQs)
Q: What is a letter of explanation in real estate?
Answer: A letter of explanation in real estate is a document that provides a written explanation or clarification for certain aspects of a real estate transaction. It is typically required by lenders, buyers, or sellers to address any discrepancies, inconsistencies, or unusual circumstances that may arise during the mortgage application or home buying process.
Q: When is a letter of explanation in real estate needed?
Answer: A letter of explanation in real estate is typically needed when there are specific issues or concerns that need further clarification. Some common situations that may require a letter of explanation include gaps in employment history, credit issues, large deposits or withdrawals in bank statements, changes in income, discrepancies in personal information, or any other circumstances that may affect the approval or understanding of a real estate transaction.
Q: Who may request a letter of explanation in real estate?
Answer: Various parties involved in a real estate transaction may request a letter of explanation. These parties may include mortgage lenders, underwriters, buyers, sellers, or even real estate agents. Lenders and underwriters often require a letter of explanation to assess the risk associated with a loan application, while buyers or sellers may request one to provide additional information or clarity regarding certain aspects of the transaction.
Q: What should be included in a letter of explanation in real estate?
Answer: A letter of explanation in real estate should include a clear and concise explanation of the situation or circumstance being addressed. It should provide relevant details, dates, and supporting documentation if necessary. The letter should be professional in tone and accurately address the concerns or questions raised. It is important to focus on providing a truthful and transparent explanation to ensure a better understanding of the situation.
Q: How long should a letter of explanation in real estate be?
Answer: A letter of explanation in real estate should be brief and to the point while still providing all the necessary information. Generally, it is recommended to keep the letter concise and limit it to one or two pages. Long, overly detailed explanations may not be as effective in conveying the necessary information and could potentially confuse the recipient.
Q: Can a letter of explanation in real estate help in the loan approval process?
Answer: Yes, a well-written and properly addressed letter of explanation can certainly help in the loan approval process. It allows the borrower to provide additional context or clarification on any discrepancies or issues that may have been identified during the underwriting process. Providing a clear and reasonable explanation can alleviate concerns and help the lender make a more informed decision regarding the loan application.
Q: Are there any specific formatting or structure guidelines for a letter of explanation in real estate?
Answer: While there are no strict formatting or structure guidelines for a letter of explanation in real estate, it is important to ensure the letter is organized and easy to read. It should include a clear introduction stating the purpose of the letter, followed by a concise explanation of the situation. Use proper grammar, punctuation, and professional language throughout the letter. Consider addressing any concerns directly and provide any necessary supporting documentation when applicable.
Q: Can a letter of explanation be used for other purposes in real estate?
Answer: Yes, a letter of explanation can be used for various purposes in real estate. Apart from addressing concerns during the loan approval process, it can be used to clarify certain aspects of a real estate contract, explain any delays or changes in the transaction timeline, provide reasons for requesting an extension, or explain any other relevant circumstances that may arise during the course of the transaction. The purpose of the letter may vary depending on the specific situation and the parties involved.
Q: What is a letter of explanation for a rental property?
Answer: A letter of explanation for a rental property is a document written by a tenant or prospective tenant to provide additional information or clarification regarding certain aspects of their rental application. It is typically requested by landlords or property management companies when they require more details about specific circumstances related to the tenant’s application.
Q: When is a letter of explanation for a rental property required?
Answer: A letter of explanation for a rental property is usually required in situations where the landlord or property manager needs further information to assess the tenant’s suitability or address any concerns that may have arisen during the application process. Some common scenarios where a letter of explanation might be necessary include gaps in employment history, past evictions or financial difficulties, a low credit score, or any other aspect of the application that requires clarification.
Q: What should be included in a letter of explanation for a rental property?
Answer: When writing a letter of explanation for a rental property, it’s important to include specific details to address the concerns or questions raised by the landlord or property manager. The letter should be concise and clear, providing a factual account of the situation. It should include information such as the reason for any past evictions or financial difficulties, steps taken to rectify the situation or improve credit, the duration and circumstances of any employment gaps, and any other relevant information that helps provide a comprehensive picture of the applicant’s background.
Q: How should a letter of explanation for a rental property be formatted?
Answer: A letter of explanation for a rental property should follow a professional and formal format. It should include the date, the landlord or property manager’s name and address, and the applicant’s contact information at the top. The letter should be addressed to the recipient and begin with a salutation. The body of the letter should be well-organized and divided into paragraphs, each addressing a specific concern or question. It should be concluded with a polite closing and the applicant’s signature.
Q: Can you provide an example of a letter of explanation for a rental property?
Answer: Here’s an example of a letter of explanation for a rental property:
[City, State, ZIP]
[Landlord/Property Manager’s Name]
[Landlord/Property Manager’s Address]
[City, State, ZIP]
Dear [Landlord/Property Manager’s Name],
Subject: Letter of Explanation for Rental Application
I am writing this letter to provide additional information regarding my rental application for [property address]. I understand that you may have some concerns or questions about certain aspects of my application, and I hope to address them with this explanation.
Firstly, I would like to clarify the gap in my employment history from [start date] to [end date]. During that period, I took time off to care for a family member who had fallen ill. While I was not actively employed, I devoted myself to their well-being. Since then, I have secured stable employment at [current employer] and have been consistently employed since [start date].
Regarding my credit history, I understand that my credit score might be lower than the ideal range. This was primarily a result of medical bills incurred during a temporary health issue a few years ago. Since then, I have diligently worked to rebuild my credit and have taken steps to improve my financial situation. I have implemented a strict budget, paid off outstanding debts, and maintained a clean payment record for the past two years.
Lastly, I would like to address the past eviction listed on my rental history. I take full responsibility for the circumstances that led to the eviction. However, it was an isolated incident that occurred several years ago, and I have learned from that experience. Since then, I have rented another property, and my
rental history has been impeccable. I have consistently paid rent on time and maintained a good relationship with my current landlord.
I understand that these factors may raise concerns, but I want to assure you that I am a responsible and reliable tenant. I have taken proactive measures to address the issues mentioned above and have made significant improvements in my personal and financial life.
I am more than willing to provide any additional documentation or references that can further support my application and demonstrate my commitment to fulfilling my rental obligations.
Thank you for considering my explanation and giving me the opportunity to provide further clarification. I sincerely hope that you will review my application with an open mind. Should you have any additional questions or require further information, please do not hesitate to contact me at [your phone number] or [your email address].
Thank you for your time and consideration.
Q: How important is a letter of explanation for a rental property?
Answer: A letter of explanation for a rental property can be highly important as it provides an opportunity for the tenant to address any concerns or questions raised by the landlord or property manager. It allows the applicant to provide additional context and clarification regarding their application, helping the landlord make a more informed decision. A well-written and thoughtful letter of explanation can make a positive impression and increase the chances of the application being approved, especially when there are specific issues that need to be addressed.
Q: Is a letter of explanation for a rental property a guarantee of approval?
Answer: No, a letter of explanation for a rental property does not guarantee approval of the application. It serves as a means for the applicant to provide additional information and context, but the final decision rests with the landlord or property manager. The letter can certainly help to address any concerns or provide reassurance, but other factors such as rental history, income verification, and background checks are also taken into consideration during the application review process.