Verifications of employment are a quick and easy way to confirm your employer’s information. If you’re applying for a mortgage, they’ll ask that you get one from each employer and send it in.
In this post, we find out What Is Verification Of Mortgage, what is a verification of employment for mortgage, how do i get a verification of mortgage, and what is loan verification.
The Verification of Employment letter can come in handy when you’re applying for a mortgage. This document is sent by your employer to confirm your employment status and salary information. The letter should include details such as name, address and contact information; employment dates; position held at the company; salary/wage rate per hour or week/month depending on what tax bracket you fall under (for example if you are single with no dependents); gross pay amount per month, quarter or year depending on how long it takes before filing taxes; deductions taken out of your paycheck (such as health insurance premiums); and other important details about yourself such as social security number or driver’s license number.
What Is Verification Of Mortgage
Say you just sold your house and want to purchase a new one. Alternately, perhaps you’ve chosen to refinance your mortgage with a different lender. In either scenario, your new lender will want to learn more about your former mortgage lender’s history with you.
They might ask for a mortgage verification in order to obtain such information (VOM).
Although that might seem scary, don’t worry. It’s a really simple procedure. It will be simpler for you to obtain approved for your new or refinanced mortgage if you give your lender that information.
What Does Mortgage Verification Mean?
You must provide a 12- to 24-month history of mortgages to lenders in order for them to determine whether you are a good risk for a mortgage. You should have few to no late payments, depending on the type of loan you’re looking for. That gives your lender confidence that you will be able to pay back your new mortgage.
They might request a verification of your mortgage in order to determine your creditworthiness (VOM). Your lender can occasionally be able to obtain the data they require from records like your credit report or mortgage bills. However, in other circumstances, they might ask your current or former mortgage servicer or lender for supporting documents.
A VOM is similar to the rumored permanent record that your professors kept on you while you were in school. It’s a report that your former mortgage servicer gives you that shows how long you held your previous mortgage, how many late payments there were, and whether they occurred.
What Information Is Included on a Mortgage Verification Form?
A VOM has the advantage of not bringing up the disagreement you had with your loan officer or the fact that you delivered the wrong paperwork to the underwriter during the approval process.
A VOM is a straightforward factual statement that includes:
How Do I Ask for a Mortgage Verification?
You must contact your lender or loan servicer if you need to request a VOM. Start by dialing the number on your monthly mortgage statement to reach your lender or servicer.
The data you require might be available from your lender or servicer. If not, they might point you toward a form or other online tool where you can make a formal VOM request.
Write a letter to your lender or servicer if you can’t receive the answers you need over the phone. In your letter, be sure to include the following details:
Don’t send your letter in the same envelope you use to submit your mortgage payments, and address it to the appropriate department. Your communication might not be read by the intended recipient if that occurs.
How long does a mortgage verification process take?
The moment the letter is sent, the time period begins, and the lender or servicer is required to:
A letter seeking further details or an extra 15 working days to look into and react may be sent by a servicer.
The fact that servicers cannot charge you a fee for responding to information requests is a positive.
Additional Forms of Verification Required for a Mortgage
The objective of a VOM is your mortgage. However, in order to submit a mortgage application, a lender will also want proof of income and employment. We will break down the income and employment verifications to show where they overlap and where they don’t with a VOM request.
evidence of income
Do not worry if lenders are asking you about your income. Lenders are legally required to confirm that you have the income to pay back your mortgage before they will approve you.
Lenders will need copies of your most recent pay stubs, as well as the W-2 and 1099 forms you provide with your tax returns, in order to confirm your income. Lenders may request up to two years’ worth of pay stubs, but you should prepare to supply at least the last two.
Your recent tax returns, earnings records from your accountant, or recent bank statements that show how much income you deposit each month will be required by your lender if you are self-employed, invest your income, work seasonally, or receive commission payments.
An IRS Form 4506-T, which is a request for a transcript of your tax return, may occasionally be required. It enables the lender to verify that what you’re providing them agrees with what you’ve told the IRS by requesting a copy of your tax returns directly from the IRS.
You might be better to apply for a mortgage utilizing an alternative income verification loan, which enables you to obtain a loan based solely on your earnings statements, depending on your position. In any case, be careful to communicate your lender’s requirements to them clearly.
evidence of employment
Your lender will want to confirm your claims and determine how long you’ve been employed once you’ve provided proof of income.
When you submit your loan application, lenders will inquire about your job situation. They will require the name and phone number of your employer as well as your gross monthly income.
Lenders will require proof that you’ve had a consistent job for at least two years. You could be required to provide information about previous employers if you’ve worked for your present employer for fewer than two years.
Alternatively, if you’re self-employed, you’ll need to provide proof to your lender that you’ve regularly been able to earn enough money to be able to make your payments, such as tax returns and/or profit/loss statements.
Lenders will also want to know if your employment history contains gaps or if you have regularly changed jobs. It’s not a deal breaker if you have gaps in your employment history or switch jobs frequently, but you must be prepared to respond to inquiries about your prior employment. If you’ve recently changed jobs, your chance of getting authorized is higher if you can demonstrate a higher income from the same line of work.
what is a verification of employment for mortgage
A verification of employment is a letter from an employer that states that you have been working there for the past seven to 12 months, depending on the requirements of your lender.
One of the requirements that an underwriter will require is verification of employment.
When you apply for a mortgage, one of the requirements that an underwriter will require is verification of employment. This is a way to verify that an applicant is employed by the company they say they are and also verify income. There are several different ways this can be done including:
- A letter from your employer confirming your employment status and salary.
- Proof of payment stubs or other financial documents showing wage amounts deposited into your account along with dates when the deposits were made each month.
What is a verification of employment?
A verification of employment is a letter from an employer that states the employee’s salary, position, and length of employment. It is used to verify the borrower’s income history. A VOE is one of the requirements for a mortgage application.
Verification of income
A verification of income is a document that confirms the amount of income you have received over the past few months. This can be a pay stub, W2, or 1099. If you are self-employed, you will need to provide an accountant’s letter.
You’ll use this document when applying for a mortgage as part of your paperwork for lenders who require it.
Verification of Employment Letter Format
Here’s a sample verification of employment letter format that could be used as a template:
- Verification of Employment Letter Format Sample
- Name of employee (include title): Joe Smith – Sales Associate
- Company name: XYZ Inc. dba XYZ Store 123 Main Street, Anytown, CA 99999-9999 (123) 555-1234 x12345@xyzstore.com
- Employee’s salary/wage information for last two years (include pay period dates): Year 1 – $50,000 per year + bonus; Year 2 – $52,000 per year + bonus; Year 3 – $53,200 per year plus bonus (date range)
- Employee’s length of service at the company: 4 years from date of hire to date being verified by lender’s customer service representative or mortgage loan officer.
how do i get a verification of mortgage
Let’s say you recently sold your home and want to buy a new home. Or maybe you’ve decided to refinance your mortgage with a new lender. In either case, your new lender is going to want to know more about your history with your previous mortgage lender.
To get that information, they may request a verification of mortgage (VOM).
While that may sound intimidating, don’t stress. It’s a fairly straightforward process. Providing your lender with that information will make it easier for you to get approved for your new or refinanced mortgage.
What Does Verification of Mortgage Mean?
Lenders want to know if you’re a good risk for a mortgage and will want you to show them 12 – 24 months of mortgage history. Depending on the type of loan you’re applying for, you’ll want to show minimal or no late payments. For your lender, that’s a good sign that you’ll be able to repay your new mortgage.
To confirm your creditworthiness, they may ask for a verification of mortgage (VOM). In some cases, your lender may be able to get the information they need from documents like your credit report or mortgage statements. But in other cases, they may ask your previous (or current) lender or mortgage servicer to provide documentation.
A VOM is like the fabled permanent record your teachers held over your head at school. It’s a report provided by a previous mortgage servicer that details how long you had your previous mortgage, whether there were any late payments and, if yes, how many.
What Is Included in a Verification of Mortgage Form?
The good thing about a VOM is that it won’t mention that time you got into an argument with your loan officer or that you sent the wrong form to the underwriter during the approval process.
A VOM is a simple statement of facts, including:
How Do I Request a Verification of Mortgage?
If you need to request a VOM, you’ll need to reach out to your lender or loan servicer. Start by calling your lender or servicer using the contact information on your monthly mortgage statement.
Your lender or servicer may be able to provide you with the information you need. If not, they may direct you to a form or online resource to submit a formal VOM request.
If you can’t get what you need over the phone, write a letter to your lender or servicer. Make sure to include the following information in your letter:
Send your letter to the right department, and don’t send it in the same envelope you use to send your mortgage payments. If that happens, your letter may not reach the right person.
How long will a verification of mortgage take?
Once the letter is sent, the clock starts ticking and the lender or servicer must:
A servicer may send a letter requesting additional information or an additional 15 business days to investigate and respond.
On the plus side, servicers are prohibited from charging you a fee for responding to information requests.
Other Types of Verification You’ll Need for a Mortgage
A VOM focuses on your mortgage. But, to apply for a mortgage, a lender will also need verification of income and employment. Our breakdown of the income and employment verifications will demonstrate how they do – and don’t – overlap with a VOM request.
Verification of income
If you feel stressed about lenders asking about your income, don’t. Before they can approve you, lenders are legally required to verify that you have the income to repay your mortgage.
To verify your income, lenders are going to ask you for copies of your most recent pay stubs and/or the W-2 and 1099 forms you submit when you file your tax returns. Expect to provide at least your last two pay stubs, though lenders may ask for up to 2 years of pay stubs.
If you’re self-employed, earn your income through investments, work seasonally or get paid by commission, your lender will want to see proof of income in your recent tax returns, earnings statements from your accountant or recent bank statements that show how much income you deposit each month.
In some cases, you’ll need to fill out an IRS Form 4506-T, which is a request for a transcript of your tax return. It gives the lender permission to get a copy of your tax returns directly from the IRS, allowing them to confirm that what you’re telling them lines up with what you’ve told the IRS.
Depending on your situation, you may be better off applying for a mortgage using an alternative income verification loan, which allows you to get a loan based only on your earnings statements. Regardless, make sure to be clear with your lender about what they need from you.
Verification of employment
After you’ve submitted proof of income, your lender is going to want to confirm your claims and see how long you’ve been employed.
Lenders will ask you about your employment status when you submit your loan application. They will need your employer’s name, phone number and your gross monthly income.
Lenders will want to see that you’ve been steadily employed for at least 2 years. If you’ve been with your current employer for less than 2 years, you may need to submit information about past employers.
Or, if you’re self-employed, you’ll need the documentation (tax returns and/or profit/loss statements) to show your lender that you’ve been able to earn enough consistently to be able to make your payments.
If you have gaps in your employment history or you changed jobs frequently, lenders will want to know about that as well. Gaps and frequent job changes aren’t deal breakers, but you must be ready to answer any questions about past employment or periods of unemployment. If you’ve had a recent employment change, you’re more likely to be approved if you show more income and you’re working in the same industry.
Is Mortgage Verification Necessary for Nontraditional Home Purchases?
Let’s say you bought your previous home (or bought the home you plan to refinance) using a nontraditional method like seller financing, which means you didn’t borrow money from a bank or other lending institution. In that case, instead of providing a VOM, you may need to provide 12 – 24 months of canceled checks. Cash payments with written receipts won’t do.
what is loan verification
Home Loan Verification Process
Security Home Mortgage takes pride in making the home loan verification process simple. On average, our loan officers have 10+ years of experience so you don’t have to be worried or intimidated with the mortgage process. They will educate and help you through your home financing options.
Pre Qualification
Pre Qualification is typically the first step in the mortgage loan process. Often, your Real Estate Agent will ask if you have been pre-approved. You can obtain a pre-approval letter from your Loan Officer by providing him/her with some financial information. The pre-approval letter will tell you the type of loan and purchase price you qualify for.
Initial Application
You may begin your official application once you have found a home and have a signed Purchase Contract by you and the sellers. Once your application is submitted, your loan officer will review all of the credit and financial information provided. Your loan officer will then have you sign the initial application package. The application package typically has between 26 and 38 documents for you to sign. These documents will include the interest rate, terms, and costs of your loan. We recommend that you closely review these documents. This process typically takes 1-4 days.
Set-Up
During this phase Security Home Mortgage requests documents from third parties. These items include: SSN verification, tax transcripts, verification of employment, title report, appraisal, and other regulatory compliance documentation. This process typically takes 1-2 days.
Processing
After the documents in the set-up phase are ordered, your loan is passed on to the processor. Your processor will review all of the third party documents as they are received, along with the income and asset documentation you provided to confirm accuracy. They will review your appraisal to ensure that it is compliant and prepare the file to be underwritten and approved. Often, we may request additional documents from you at this stage. This process typically takes 10-15 days.
Underwriting
The underwriter has the final say on if a loan will be approved. He/she will closely review income, assets, property, appraisal, and other regulatory compliance documentation to ensure that the file meets industry guidelines. Occasionally, we may request additional documents from you at this stage. This process typically takes 2-4 days.
Closing
At least three days prior to closing, you will receive an initial Closing Disclosure (CD). This document will contain the settlement costs that are associated with your loan. Once the CD is signed and three days have passed, you are able close on your loan.
At closing you will meet with the title company to sign legal documents finalizing your agreement regarding the terms and conditions of your mortgage.
Funding
If you are purchasing a home, the day after you have signed the closing documents the funds will be disbursed, recorded, and title company will transfer ownership of the property to you.
If you are refinancing, most transactions have a three-day right of rescission after signing the closing documents. Your loan will be funded and recorded; the transaction will then be complete.