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A verification of employment letter is a document provided by your employer that confirms your current employment status and income. Some lenders will need to verify your employment when you apply for a mortgage, line of credit, lease or loan.
Why does my lender need a verification of employment letter?
When you apply for a mortgage, the lender will need you to supply evidence of your employment status and income. This information is needed to verify that you earn sufficient income to make the monthly mortgage payments without enduring financial hardship.The bank may need to verify your employment to ensure that you are unlikely to default on the loan.
What needs to be included in the letter?
It’s a good idea to check with your lender to find out if they have any specific requirements. The letter will generally need to include:
Employer information. Most lenders require your employment letter to be issued on an official company letterhead that contains the company’s name, address, logo and contact details.
Employment status. The letter should contain information about your employment status, including how many hours you work, your position title and how long you’ve been employed.
Financial information. The letter should state whether you’re an hourly or salaried employee, how much you make and if you get bonuses.
Date and signature. Make sure the letter is dated and signed.
What does a verification of employment letter look like?
Company name (official letterhead)123 Working St.
New York, NY 10005
08/30/2019
To whom it may concern,
I am writing this letter to verify that Laura A. Baxley is currently employed with XYZ Pty Ltd as a Digital Marketing Manager. She has been employed with us since March 2016.
Laura currently works on a full-time basis, averaging 40 hours per week. She earns a salary of $65,000 per year, paid biweekly, plus potential yearly bonuses.
Should you have any questions, please do not hesitate to contact me at (123)456-7890
Kind regards,
(SIGNATURE)
Justin Hamilton
Human Resources Manager
XYZ Pty Ltd
Will all lenders require a letter to verify my employment?
No, but most lenders will require some sort of verification. Aside from a letter, your lender may call or email your employer or give you a form for them to fill out and sign.
What if it’s a phone call?
If your lender lets you know that they’ll be calling your employer to verify your employment, let your boss know to expect the call. It’s also a good idea to ask your employer if they need any information from you and thank them for helping you.
Can I provide my lender with a faxed copy or does it need to be the original?
This will vary depending on the lender’s individual policies and eligibility requirements, but most lenders will accept a faxed copy of the employment letter.
How recent does the employment letter need to be?
Most lenders require the employment letter to be no older than 60 days from the date of receipt, but it can vary from lender to lender. If you have a letter that’s more than a couple of weeks old, ask your lender if you’ll need a copy that’s been signed and dated more recently.
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Bottom line
Most lenders will want to verify your employment. This can involve getting a letter from your employer, having them fill out a form or having your lender call or email them. Whichever option they choose, the process is generally pretty simple.
If you’re just getting started researching the mortgage process, compare home loan lenders to find one that fits your needs.
Belinda Punshon worked for Finder as a writer on home loans and property and as a corporate communications executive. She has a Masters in Advertising, Public Relations and Journalism from the University of New South Wales and a Bachelors in Business from the University of Technology Sydney.
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