The World's Best Letter of Explanation (LOE) Maker
Create letters of explanation (also called hardship letters or letters to your lender) that help you get approved for your mortgage. Choose from more than 25 free templates for employment gaps, credit issues, large deposits, bankruptcy, and other common scenarios. Get lender-ready letters in minutes with no registration required.
Most Popular Letters
Address Discrepancy Letter
📄Create a letter explaining why addresses don't match in your mortgage file
Bankruptcy Explanation Letter
💳Explain your bankruptcy circumstances and credit recovery to your lender
Derogatory Credit Letter
💳Explain derogatory credit items and show how you resolved them
Employment Gap Letter
💼Explain employment gaps and confirm your current job stability
Large Deposit Letter
💰Explain large or unusual deposits in your bank account
All Letter Templates
(25)Address Discrepancy Letter
📄Create a letter explaining why addresses don't match in your mortgage file
Bankruptcy Explanation Letter
💳Explain your bankruptcy circumstances and credit recovery to your lender
Child Support / Alimony Letter
⚖️Confirm your support payment obligations and current status to your lender
Citizenship / Residency Letter
📄Confirm your citizenship or residency status for your mortgage lender
Credit Inquiry Explanation Letter
💳Explain recent credit inquiries and rate shopping on your credit report
Debt Paid Outside Closing Letter
💰Confirm that you paid off debt outside of the closing process
Debt Settlement Letter
💳Explain debt settlements and confirm account resolution to your lender
Derogatory Credit Letter
💳Explain derogatory credit items and show how you resolved them
Divorce / Separation Letter
⚖️Explain your divorce or separation status and financial obligations
Important Disclaimer: Homebuyer.com is not a mortgage lender or financial institution. This tool is a free service to generate letters of explanation. Always consult your lender to ensure letters meet their specific requirements and comply with all applicable regulations.
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Our letter generator has helped thousands of home buyers create letters of explanation that meet lender requirements and speed up their loan approval process.
"I needed to explain a gap in employment and had no idea how to write it properly. This tool made it so easy and my lender accepted it immediately."
- Jessica M., First-time Homebuyer
"The bankruptcy explanation template was exactly what I needed. Professional format and covered everything my loan officer requested."
- Robert K., Homebuyer
"Free and no registration required. I was able to generate my large deposit explanation letter in minutes and submit it the same day."
- Maria L., Homebuyer
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How to Create a Letter of Explanation
Follow these simple steps to create a letter of explanation that meets lender requirements and helps your mortgage application. Takes about a minute to complete.
Learn more about letters of explanation and when they're needed.
Choose Your Template
Browse 25+ templates by category or use the search function. Each template is designed for specific scenarios like employment gaps, credit issues, large deposits, bankruptcy, and more.
Fill Out the Form
Complete the guided form with your specific details. Include exact dates, amounts, and circumstances. The form ensures you don't miss any required information lenders need.
Review and Generate
Preview your letter in real-time as you type. Make any final edits, then generate a professional PDF ready for signatures and immediate submission to your lender.
Common Situations That Require Letters of Explanation
As part of your mortgage approval, lenders review your financial history to make sure you can manage your loan payments. When they spot something unusual or in need of more context, they ask for a letter of explanation (LOE). This is completely normal - many people make at least one LOE as part of their application.
An LOE is not an indication of weakness. It's a point of clarity. Instead of leaving lenders to guess about your situation, you get to tell your story in your own words. A clear explanation turns potential red flags into non-issues.
Employment Gaps
Had a period without work? Maybe you were laid off, took time off for family, went back to school, or dealt with a health issue. Whatever the reason, lenders want to understand what happened and whether your current job is stable.
An employment gap letter explains the circumstances and demonstrates that you're back on solid financial footing. Include details about why the gap happened, how long it lasted, and what you've done since then to stabilize your employment.
Credit Issues
Late payments, collections, or other credit problems on your report? Life happens - medical bills, job loss, divorce, or other unexpected events can derail even the most careful financial planning. Lenders understand this, but they want to know the full story.
A credit issues letter explains what caused the problems and shows how you've improved your financial habits since then. Focus on what you learned and the steps you've taken to prevent future issues.
Large Bank Deposits
Got a big deposit in your bank account recently? Could be a work bonus, tax refund, gift from family, insurance payout, or money from selling something valuable. Lenders need to verify that large deposits come from legitimate sources and aren't borrowed money.
A large deposit letter documents exactly where the money came from and provides the paper trail lenders need. Include supporting documentation like gift letters, sale receipts, or employer statements.
Past Bankruptcy
Bankruptcy on your record? You're definitely not alone - many people have been through financial difficulties and successfully bought homes afterward. Lenders can approve mortgages after bankruptcy, but they want to understand what happened and see evidence of financial recovery.
A bankruptcy letter explains the circumstances that led to the bankruptcy and demonstrates how you've rebuilt your finances. Show what you learned and the steps you've taken to prevent future financial problems.
Address Mismatches
Addresses don't match up across your paperwork? This commonly happens when you've moved recently, have mail forwarded to a different address, or use your work address for some documents. Lenders need to verify your actual residence for tax and insurance purposes.
An address discrepancy letter clears up any confusion about where you actually live and provides a clear timeline of your residential history.
Don't see your situation? Browse all 25 templates above - we have letters for almost every scenario lenders ask about.
Why Choose Our Letter of Explanation Generator?
Get letters that actually work with lenders. No rejected paperwork, no delays, no back-and-forth with your loan officer.
Lender-Approved Templates
All templates are designed to meet standard lender requirements and include the necessary legal language and formatting that mortgage lenders expect to see.
Real-Time Preview
See your letter update instantly as you type. Review and edit your explanation before generating the final PDF document.
Comprehensive Template Library
Choose from 25+ templates covering employment gaps, credit issues, large deposits, bankruptcy, and other common mortgage scenarios.
No Registration Required
Generate letters instantly without creating an account or sharing personal information. Your privacy is protected throughout the process.
Digital Signature Ready
Download professional PDFs with built-in signature fields. Add your digital signature online and submit directly to your lender - no printing or scanning required.
Industry Expertise
Letters created by mortgage industry professionals who understand lender requirements and common approval scenarios.
Frequently Asked Questions
What is a letter of explanation for a mortgage?
A letter of explanation is a simple letter that explains anything unusual in your mortgage application. Maybe you had a gap in employment, some late payments, or a large deposit in your bank account. Your lender wants to understand what happened before it approves your loan.
When do I need to write a letter of explanation?
Your loan officer will tell you if you need one. Common reasons include job gaps, credit issues, bankruptcy, large bank deposits, or if your addresses don't match up. They're pretty routine - lots of people need them.
Are these letter templates free to use?
Yes, completely free. No hidden fees, no account needed, no spam emails. Just pick your template, fill it out, and download the PDF.
Do the letters meet lender requirements?
Yes, they're written to work with lenders. That said, every lender is a bit different, so double-check with your loan officer if they have any specific requirements.
How long does it take to create a letter?
About a minute. Pick your template, fill in your details, and you're done. The hardest part is usually just gathering your dates and details beforehand.
Can I edit the letters after generating them?
Yes, you can edit everything as you go - the letter updates in real-time so you can see exactly how it looks. Once you download the PDF, you can still edit it if needed.
What information do I need to provide?
Depends on the letter, but usually your basic info, relevant dates, dollar amounts, and a brief explanation of what happened. The template will walk you through exactly what you need.
Do I need to sign the letter?
Yes, you'll need to sign and date it. Sometimes, a lender want will your LOX notarized, but that's rare. Your loan officer will tell you if it's required.
When in the mortgage process do I need these letters?
Usually during underwriting, after you submit your application. Your loan officer reviews your file and requests letters for anything that needs explanation. Sometimes you can submit letters upfront if you know there are issues.
Will a letter of explanation hurt my chances of approval?
No, letters actually help your chances. Lenders prefer clear explanations over unexplained issues. A good letter shows you're responsible and transparent about your financial history.
Is a hardship letter the same as a letter of explanation?
Yes, hardship letter, explanation letter, and letter to your lender all mean the same thing. Different people use different names, but they're all letters that explain unusual circumstances in your mortgage application to help lenders understand your situation.
Most Popular Letter Templates
Get started quickly with our most commonly used letter templates. Each template includes detailed guidance and meets lender requirements.
Employment Gap Letter
Explain periods of unemployment and demonstrate current job stability to your lender.
Create employment gap letter →Credit Issues Letter
Address derogatory credit items and show how you've resolved past financial issues.
Create credit explanation →Large Deposit Letter
Document the source of significant bank deposits for your mortgage application.
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