Mortgage LOX Maker: Non-Arm's Length Transaction Letter
Make your own Letter of Explanation (LOX) for non-arm's length transactions. Explain family or related-party real estate purchases. Generate instant PDFs for your lender with digital signature capture.
Your Information
Letter Preview
I, {{borrowerName}}, confirm that the purchase of {{propertyAddress}} from {{sellerName}} is a non-arm's length transaction. {{sellerName}} is my {{relationshipToBuyer}}.
This sale is a legitimate transaction, and the purchase price reflects the fair market value as supported by the appraisal. No party is receiving any undisclosed benefit, and all terms are fully disclosed.
{{borrowerName}}
{{borrowerEmail}}
{{borrowerPhone}}
Borrower's Signature: {{signature:borrowerSignature}}
Date: {{signatureDate}}
Tips for Success
- Keep explanations brief and factual
- Attach supporting documentation when possible
- Review all information before signing
- Submit within 48 hours of your loan officer's request
Important Reminders
- All information must be truthful and accurate
- False statements may result in loan denial
- Keep copies for your records
- Contact your loan officer with questions
When To Use A Non-Arms Length Transaction Letter
Parent to Child Sale
Your parents are selling you their home or investment property.
Sibling Property Transfer
You're buying property from a brother, sister, or other sibling.
Grandparent to Grandchild
Your grandparents are selling you property, often at below market value.
Business Partner Sale
You're purchasing property from a business partner or professional associate.
Close Friend Transaction
A close friend is selling you property in a non-arm's length transaction.
Common Scenarios Requiring Multiple Letters
Non-Arms Length + Gift of Equity:
- Use this non-arms length transaction letter to explain family sales
- Use our gift of equity letter to document equity gifts
- Use our source of funds letter to document purchase funds
How to Use This Non-Arms Length Transaction Letter Generator
Gather Your Information
Collect all necessary details and supporting documentation before starting the generator.
Complete the Form
Fill out all required fields in the generator. The preview will update in real-time as you type.
Review and Sign
Review your letter for accuracy, add your digital signature, and download the PDF.
Submit to Your Lender
Send the completed letter to your loan officer along with any supporting documentation.
Supporting Documents Your Lender May Need
| Document | What It Tells Your Lender |
|---|---|
| Property appraisal showing fair market value | Provides additional verification and context for your situation |
| Purchase contract with terms | Provides additional verification and context for your situation |
| Relationship documentation | Provides additional verification and context for your situation |
| Seller's property ownership records | Provides additional verification and context for your situation |
| Gift of equity letter (if applicable) | Provides additional verification and context for your situation |
Frequently Asked Questions
When will I need a non-arms length transaction letter?
Your loan officer will request a non-arms length transaction letter if you're buying property from family members, business partners, or close friends.
Why do lenders care about family property sales?
Lenders want to ensure the sale price reflects fair market value and that no party receives undisclosed benefits.
Is an appraisal required for family sales?
Yes, lenders typically require an independent appraisal to confirm the purchase price reflects fair market value.
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