Letter Of Explanation Template

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Sample Letter of Explanation for Mortgage Download Printable PDF
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Table of Contents

What is a Letter of Explanation?

A Letter of Explanation, also known as a LOX, is a document that provides additional information or clarifies certain aspects of a situation. It is commonly used in various contexts such as mortgage applications, job applications, visa applications, and more. The purpose of a Letter of Explanation is to provide a detailed explanation for any discrepancies, gaps, or unusual circumstances that may arise.

Purpose of a Letter of Explanation

The main purpose of a Letter of Explanation is to provide a detailed account of the situation at hand. It allows the recipient to understand the context and background of the situation, providing them with the necessary information to make an informed decision. A well-written Letter of Explanation can help address any concerns or doubts that the recipient may have, increasing the chances of a positive outcome.

Some common purposes of a Letter of Explanation include:

  • Explaining credit issues or discrepancies
  • Addressing gaps in employment history
  • Clarifying unusual financial transactions
  • Providing additional information for visa applications
  • Explaining any other relevant circumstances

Format and Structure

The format and structure of a Letter of Explanation may vary depending on the specific situation and the requirements of the recipient. However, there are some general guidelines that can be followed:

  • Begin with a clear and concise introduction, stating the purpose of the letter.
  • Provide a detailed explanation of the situation, including any relevant dates, names, or numbers.
  • Use a professional and respectful tone throughout the letter.
  • Break the letter into paragraphs to improve readability.
  • End the letter with a polite closing and include any necessary contact information.

It is important to keep the letter focused, concise, and to the point. Avoid unnecessary details or irrelevant information that may distract from the main purpose of the letter.

Tips for Writing a Letter of Explanation

Writing a Letter of Explanation can be a challenging task, especially when dealing with sensitive or complex situations. Here are some tips to help you write an effective and convincing letter:

  • Be honest and transparent: Provide accurate information and avoid exaggerations or false statements.
  • Stay organized: Clearly outline the main points you want to address and present them in a logical order.
  • Use clear and concise language: Avoid jargon or technical terms that may confuse the reader.
  • Provide supporting documents: If applicable, include any supporting documents or evidence that can strengthen your explanation.
  • Proofread and edit: Take the time to review your letter for any grammatical errors or typos.

Common Situations Requiring a Letter of Explanation

There are various situations where a Letter of Explanation may be required. Some common examples include:

  • Applying for a mortgage loan
  • Explaining gaps in employment history
  • Addressing credit issues or discrepancies
  • Providing additional information for visa applications
  • Explaining unusual financial transactions

It is important to carefully review the requirements of the specific situation to ensure that the Letter of Explanation addresses all necessary points.

Sample Letter of Explanation Template

Below is a sample template that can be used as a starting point for writing a Letter of Explanation:

[Your Name]
[Your Address]
[City, State, ZIP Code]
[Date]

[Recipient’s Name]
[Recipient’s Address]
[City, State, ZIP Code]

Dear [Recipient’s Name],

Introduction: State the purpose of the letter and provide a brief background of the situation.

Main Body: Provide a detailed explanation of the situation, addressing any relevant information, dates, or numbers. Use paragraphs to break down the information and improve readability.

Closing: End the letter with a polite closing, expressing your willingness to provide any additional information if needed.

Sincerely,
[Your Name]

Conclusion

A well-written Letter of Explanation can greatly enhance your chances of success in various situations. Whether you are applying for a mortgage, seeking employment, or applying for a visa, taking the time to craft a clear and concise letter can make a significant difference. Use the provided tips and sample template as a guide to help you write an effective Letter of Explanation.