Mastering the Art of Employment Verification for Mortgage Applications
When you’re poised to buy your dream home and submit a mortgage application, your lender will conduct an essential verification of all income and asset information. One critical part of this process includes verifying at least two years of your employment history.
Why is Employment Verification Important?§
Mortgage lenders are in the business of assessing risk and profitability. Verifying two years of stable employment, whether with the same employer or within the same industry, helps them determine your ability to continue meeting mortgage payments consistently. Stability translates into lower risk for the lender.
Direct Employment Verification Process§
To validate your employment history, lenders typically reach out to every employer you’ve worked for in the two years leading up to your loan application. This is initially facilitated through formal written requests sent to these employers to gather details on the dates of employment, income information, and positions held listed on your application. These filled verification forms are then included in your loan file.
The Final Verification Step: Verbal Confirmation§
Just before your loan closes, lenders usually perform one last verification step through a verbal confirmation of employment. A phone call is made to your current employer to confirm that you still hold the same employment status as stated in your application. This final step ensures that there haven’t been any last-minute changes that might affect your loan qualification.
Final Words§
Employment verification is a critical part of the mortgage approval process. Having a stable employment history can make this a smooth process and bring you one step closer to owning your desired home.
Related Terms: mortgage lender, income verification, loan application, employment stability.
