• Who We Are
    • Who We Are
    • Testimonials
    • Core Values
  • Find Us
  • Resources
    • Loan Checklist
    • First Time Homebuyers
    • Refinancing
    • Blog – Old
    • Mortgage Calculators
  • Real Estate Investors
  • Join Us
  • Partner With Us
  • Get In Touch
logo-header
  • Who We Are

      Who We Are

      Testimonials

      Core Values

  • Find Us
  • Resources

      Loan Checklist

      First Time Homebuyer

      Refinancing

      Mortage Calculator

      Blog

  • Real Estate Investors
  • Join Us
  • Partner With Us
  • Get In Touch
BluPrint News

The Easy Guide to Writing a Letter of Explanation (LOE) 

Published On April 29, 2025

If you’re applying for a mortgage and your lender asks for a Letter of Explanation (LOE), don’t panic! It’s just a simple letter where you explain something in your financial history — like a late payment, a big deposit, or a job gap. It’s totally normal and way more common than you might think.Think of it like this: your lender is trying to connect the dots. You’re just helping them see the full picture.

Why Would a Lender Need an LOE?

Some typical reasons include:

  • Late or missed payments
  • Big, unexplained deposits
  • Gaps in your employment history
  • Changes in your income
  • Credit issues (like a past bankruptcy)

They’re not judging you — they just need to understand what happened and whether it’s likely to happen again.

What to Include in Your Letter

When writing your LOE, make sure you cover these basics:

✅ Your full name and contact information
✅ Date you’re writing the letter
✅ Loan application number (if you have one)
✅ A short, honest explanation of the situation
✅ What caused it, and if it’s been resolved
✅ Supporting documents (if you have them)
✅ A polite closing and your signature

Tips to Make It Easy

Be brief: Stick to the facts. A few sentences are usually enough.

Be honest: It’s better to be upfront now than have issues later.

Be professional: Even though it’s casual writing, keep it respectful and clear.

Stay positive: Focus on what’s changed for the better.score, and financial profile to help you understand your loan options early on. A strong pre-approval helps you stand out in multiple-offer situations and gives you confidence during your home search.

Quick Example

Subject: Letter of Explanation for Employment Gap

Dear [Lender Name],

I am writing to explain the gap in my employment from March 2023 to July 2023. During this time, I took a break to care for a family member. I returned to full-time employment in August 2023 and have been steadily employed since.

Thank you for considering this explanation. Please let me know if you need any additional information.

Sincerely,
[Your Name]

Ready to Become a Homeowner? Let’s Talk

At BluPrint Home Loans we’re here to make the mortgage process smooth, simple, and stress-free. Need help writing your LOE or gathering the right documents? We’ve got your back — just give us a call!

Ready to move forward? Give us a call!


Mortgage Image for Home Buying
Navigating the 2025 Mortgage Landscape: What Homebuyers Need to Know
Previous Article

logo_footer

BluPrint Home Loans is a Division of NFM, Inc. dba NFM Lending, NFM NMLS #2893. NFM is an Equal Housing Lender. Some products and services may not be available in all states. Licensing and disclosure information can be found at https://nfmlending.com/licensing/

Get In Touch
equal housing lender icon

Corporate HQ

607 N. Vulcan Ave, Unit 6, Encinitas, CA 92024

hello@bluprinthomeloans.com

(888) 405-4580

Follow Us

Facebook Instagram Linkedin

MAIN LINKS

  • Who We Are
  • Testimonials
  • Find Us
  • Resources
  • Join Us
  • Partner With Us
  • Get In Touch

Resources

  • Mortgage Calculator
  • Loan Checklist
  • First Time Homebuyers
  • Refinancing
  • Blog – Old
Accessibility | Privacy Policy | Terms of Use | Texas Consumer Disclosure | DNC Compliance Policy | California Consumer Privacy Notice (CCPA)
Other Links
  • Arizona Mortgage Lender
  • Alabama Mortgage Lender
  • California Mortgage Lender
  • Colorado Mortgage Lender
  • Connecticut Mortgage Lender
  • Delaware Mortage Lender
  • District of Columbia Mortage Lender
  • Florida Mortage Lender
  • Georgia Mortage Lender
  • Idaho Mortage Lender
  • Illinois Mortage Lender
  • Indiana Mortage Lender
  • Kansas Mortage Lender
  • Kentucky Mortage Lender
  • Louisiana Mortage Lender
  • Maine Mortage Lender
  • Maryland Mortage Lender
  • Massachusetts Mortage Lender
  • Michigan Mortage Lender
  • Minnesota Mortage Lender
  • Mississippi Mortage Lender
  • Montana Mortage Lender
  • Nevada Mortage Lender
  • New Hampshire Mortage Lender
© 2025 NFM Lending, LLC dba BluPrint Home Loans. America’s Common Sense Lender® Trade/service marks are the property of NFM Lending. www.nfmlending.com. Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act.

Equal housing lender. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Refinancing an existing loan may result in the total finance charges being higher over the life of the loan. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Qualifying credit score needed for conventional loans. LTV’s can be as high as 96.5% for FHA loans. FHA minimum FICO score required. Fixed rate loans only. W2 transcript option not permitted. Veterans Affairs loans require a funding fee, which is based on various loan characteristics. For USDA loans, 100% financing, no down payment is required. The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included. Loan is limited to the appraised value without the pool, if applicable. The pre-approval may be issued before or after a home is found. A pre-approval is an initial verification that the buyer has the income and assets to afford a home up to a certain amount. This means we have pulled credit, collected documents, verified assets, submitted the file to processing and underwriting, ordered verification of rent and employment, completed an analysis of credit, debt ratio and assets, and issued the pre-approval. The pre-approval is contingent upon no changes to financials and property approval/appraisal. For Arizona originators: AZ# BK-0934973. In Alaska, business will only be conducted under NFM Lending and not any of our affiliate sites.