Verification of Employment
Definition and meaning of Verification of Employment in real estate.
Verification of employment is a standard process where a mortgage lender contacts a borrower's employer to confirm their job status, title, dates of employment, and salary.
In more detail
The lender initiates this process by sending a form to the employer or using an automated verification database. Underwriters typically perform a full verification of employment early in the loan application process and then complete a verbal follow-up check just before closing. If a borrower has recently changed jobs, the lender may require additional documentation, such as employment contracts or historical pay stubs.
Ensuring the stability of employment is a critical step in verifying the debt-to-income ratio, which measures the borrower's ability to handle monthly mortgage payments.
Key facts
| Category | Mortgages & Financing |
|---|---|
| Initiated by | Underwriter or processor |
| Completed by | Employer human resources department |
| Frequency | Typically done at application and repeated before closing |
A few days before closing on a home purchase, the underwriter calls the buyer's employer for a final verification of employment to confirm the buyer is still employed.
Frequently asked questions
What happens if I change jobs during the mortgage process?
A job change can delay or disqualify your loan application, so you should notify your lender immediately to see if the new employment meets underwriting guidelines.
What does a verbal verification of employment check?
A verbal verification is a quick phone call to the employer within ten days of closing to confirm that the borrower is still actively employed.