Hi,

I applied for a refi on 8/1 and it closed on 9/1 as owner occupied 30 year fixed with Bank1. This has been my first house (its SFH) and I have lived continuously in it for 6 years.

I saw another house(also SFH), bid on it on 9/10 and offer got accepted on 9/12 and I am in contract. I approached bank2 for mortgage application for the new house. Both house1 and house2 are v similar in sq footage and floorplan. House 1 is 10% less in value than house2.

My mortgage guy for bank2 told me that bank2 can take issue with this recent refi, as I have not occupied the house for 12 months after the refi. He also said that it is not possible to skirt the issue, since I have credit hit from bank1 and in the credit system it shows recent payoff by bank1 to older bank. Note that I do need rental income from house1 in order to quality for house2 Debt to income.

He suggests rather than skirting the problem, be upfront, address the issue and present an explanation letter to the underwriter, even before the underwriter asks for it. So my questions:

• 1) Is this a good idea? Or should I first let the underwriter take issue and then provide him/her with an explanation letter?
• 2) What should I write in that explanation letter: I was thinking something like below: please help review on wordings I should and should not put on the letter.

Dear Underwriter.

XX Ave, XX city, XX state is my dream house and we would be thrilled to get a mortgage for the house. I was living in home1 for 6 years and was recently approached by a company which offered to slightly better our rate for no cost to us. However, my dream house listing in my dream neighborhood came up shortly afterwards and it makes a lot of sense for us to move there: it is closer to me and my wifes work, school district is better, its more upscale neighborhood to raise a family, crime is less. The new house has larger lot/yard, has updated kitchen and baths, has air conditioning, hardwood floors instead of carpet. The current house is very original and a starter home we bought.

House2 neighborhood is v expensive and houses there are usually outside our budget, but this one suddenly came available within our budget and we would love to be the new owners and raise our family there.

Best,

XX