It’s not unusual these days to have a lender request a “letter of explanation” from a home buyer or someone who is buying or refinancing their home. A letter of explanation (or LOE) is often used to help provide more information to the underwriter or lender based on information that is disclosed on an application or credit report. LOE’s may address anything from gaps in employment to inquiries on a credit report and is intended to help explain or add support to the transaction. If a borrower has had an extenuating circumstance and is trying to have an exception made to an underwriting guideline, they may be asked to write a LOE.
Can I Buy a New Home After Refinancing as Owner Occupied?
October 28, 2010 by 13 Comments
This situation comes up more often than you might expect: a homeowner refinances their current home using owner-occupied financing — getting a better rate than they would on an investment property — and then wants to buy a new primary residence. Is that allowed? And if so, how soon?
The short answer is yes, with important caveats. Here’s what lenders and underwriters look for. [Read more…]
Is it a Primary Residence, a Second Home or Investment Property?
April 23, 2008 by 437 Comments
Every so often, someone will be interested in financing for a home they will not be living in 100% of the time…they want the best rate which is “owner occupied”. It’s crucial to know the difference in your lenders eyes and to be completely upfront so you avoid unintentionally committing fraud. Bottom line, the property and situation need to make sense to the underwriter.
This popular article was originally published in 2008 and updated in 2026. [Read more…]
