Writing an Effective Motivational Letter for a Mortgage Loan

Getting approved for a mortgage loan can be a challenging process. Lenders want to ensure borrowers can repay the loan so they scrutinize applications carefully. One document that can help your chances of getting approved is a strong motivational letter. This type of letter allows you to explain your financial situation and demonstrate why you are qualified for the mortgage loan.

What is a Motivational Letter for a Mortgage?

A motivational letter, also known as a letter of explanation, is a formal letter you submit along with your mortgage application. It provides additional details about your financial history and ability to repay the loan. The letter gives context around any potential red flags in your application, such as gaps in employment, credit report issues, or large transactions in your bank statements.

The motivational letter serves as an opportunity to tell your story and advocate for yourself as a borrower. It allows you to highlight strengths that may not be evident from the application alone. Submitting a thoughtful well-written motivational letter can help boost your chances of getting approved for the mortgage.

When Do You Need a Motivational Letter?

In most cases, a lender will request a motivational letter if they need clarification on certain aspects of your application. However, even if not explicitly required, it can be a good idea to proactively submit one.

Here are some common situations when providing a motivational letter is recommended

• You have a low credit score or negative marks on your credit report
• You have gaps in employment
• You recently changed jobs
• You want to explain the source of a large deposit or withdrawal in your bank account
• Your income comes from an unsteady source, like self-employment
• You opened a new credit card or have high balances

Essentially, any time there are potential red flags or abnormalities in your financial profile, a motivational letter can help preemptively address any concerns from the lender.

How to Write an Effective Motivational Letter

Follow these tips to craft a compelling motivational letter for your mortgage application:

Keep it concise

The letter should be no longer than one page. Cut out unnecessary details and get right to the point.

Be transparent

Honesty is key. Make sure all the information you provide is factual and accurate. Avoid exaggeration or embellishment.

Use a professional tone

Write the letter with formality using polished grammar and punctuation. This shows the utmost respect for the lender.

Explain the context

Describe the backstory behind any red flags or abnormalities in your application. Explain the circumstances that led to issues and how you resolved or plan to resolve them.

Highlight strengths

Note positive attributes that demonstrate your creditworthiness, such as steady employment history, savings accounts, financial support from family, strong recent credit history, etc.

Include supporting documents

Attach any documents that validate the claims made in your letter, like proof of income, letter from employer, etc.

Proofread carefully

Be sure to thoroughly proofread the letter before submitting. Check for any errors or typos, which can diminish credibility.

Sample Motivational Letter

Use this sample as a template when drafting your own motivational letter:

Date

Lender Name and Address

RE: Your Name and Application Number

Dear Lender,

I am writing this letter to provide additional information regarding my recent mortgage loan application for amount submitted on date. I understand my application indicates some gaps in employment during 2018 which may raise concerns about repayment ability.

In 2018, I left my previous job due to family reasons and was unemployed for 6 months. During that time, I relied on my emergency savings to cover living expenses. As evidenced by my bank statements, I maintained a steady savings balance throughout this period.

In August 2018, I accepted a new position at Company as a Role making $XX,XXX annually. I have been steadily employed in this role since, as highlighted by the 2 years of paystubs provided.

Sincerely,

Your name

Tips for Approval

Follow these tips to boost your chances of getting your motivational letter and mortgage application accepted:

• Proactively submit a letter even if not required
• Thoroughly explain any red flags or abnormalities
• Keep documentation organized and readily available
• Highlight steady income history
• Demonstrate substantial savings
• Clean up credit report prior to applying
• Consider adding a co-signer if necessary
• Be cooperative, patient, and respectful with lender

With a well-written motivational letter and persistence, you can increase your chances of convincing a lender to approve your mortgage loan. Use the tips and sample letter provided as a guide when drafting your own document. Be sure to proofread closely and provide relevant supporting documentation. A strong letter could be just what you need to finally become a homeowner.