Verification of your employment is part of the underwriting process of every mortgage lender. They will perform a verification on your employment prior to sending the loan approval decision. Every lender has different employment verification procedure. They will review the latest income documents that you have submitted in this procedure. The reason why they want to verify your employment is to determine your salary, length of employment and other factors.
To verify your employment, they will attempt to make a phone call to your employer. They will question the employer about the information you have entered in the application form. They will ask your employer things like your month salary, how long you have been working with them and whether you receive any promotion recently. Some lenders will just send a fax to your employer and your employer will have to fax back the details in order for them to confirm the information on your loan application.
Several types of income are taken into account when mortgage lenders verify your income such as W-2, 1099, part time, overtime, social security, royalty, pension, and child support income. The income after deduction of the income tax will be used to determine your qualification for the loan. It is best to have at least 2 years of employment history before you apply for a mortgage. If you just recently get a new job and have been unemployed previously, they will just need you to submit the 30 days pay stubs.
Self employed people will need to have the more savings in bank account and be earning more to get approved for the mortgaged. If you are self employed, they will ask you to provide your business license. You must fill in the IRS Form 4506-T so that the lender will have the permission to request for the latest tax return. If you have an accountant, you can let him discuss with the lender about your business for example how long your business remains successful.
Prior to applying, make sure you ask them what type of document you need to submit. Missing a single document can delay the approval of your mortgage. The copies of your financial document can be sent to the lender via mail, email or fax. When filling in the application form, make sure you provide truthful information about your income or business.
If you tell lies, the lender will soon find out when they check the details on your application. Lying may help you to get approved for a larger amount but you may have problem in paying back afterwards. The most important thing is that you get approved of a loan that you can afford to pay back.