Disclosure: We receive a commission if you click on an affiliate link and buy something we recommend. This post contains affiliate links. Please check out our disclosure policy for more details.
Getting a mortgage can be frustrating, especially with all the work that goes on behind the scenes. An underwriter handles the majority of that work, reviewing and validating the mountains of data you must provide your lender in order to be approved for a loan.
The underwriter must adhere to the regulations set forth by the particular mortgage company, the state, the federal government, and the investor who is guaranteeing the loan (Fannie Mae, Freddie Mac, the Department of Veterans Affairs, etc.), which makes the underwriting process difficult. ).
The Short Answer:
Yes, it’s possible for your lender to do an employment verification after closing. While not all lenders do this, it’s becoming increasingly common, especially for larger loans or those with higher risk factors
The Long Answer:
Buying a house is a major life event, and it’s important to be prepared for all the steps involved, including the employment verification process. Here’s a breakdown of what you can expect:
First Verification of Employment:
This typically happens during the pre-approval stage of the mortgage process. The lender will contact your employer to verify your employment status, salary, and length of employment.
Second Verification of Employment:
This usually occurs a few days before closing. The lender wants to make sure you have a job and that your income hasn’t changed significantly.
Third Verification of Employment:
This is less common, but some lenders may do a third verification after closing, especially if:
- They’re undergoing an audit.
- They’re selling your loan to another institution.
- They have concerns about your ability to repay the loan.
What to Expect During the Verification Process:
The lender will typically contact your employer by phone or email. They will ask for basic information, such as your name, job title, salary, and start date. They may also ask for your supervisor’s contact information.
Tips for a Smooth Verification Process:
- Provide accurate information: Make sure the information you provide to your lender about your employment is accurate and up-to-date.
- Stay in contact with your employer: If you’re planning to change jobs, let your lender know as soon as possible.
- Avoid making major financial changes: Don’t make any large purchases or take on new debt while you’re in the middle of buying a house.
- Work with a reputable lender: Choose a lender with a good reputation and a track record of smooth closings.
The Bottom Line:
Employment verification may seem like an extra hassle, but it’s a crucial step in the mortgage process. You can contribute to a successful and seamless closing by being informed about the procedure and being ready.
Additional Resources:
- What Does It Cost to Sell a House?
- The Real Estate Closing Process for Buyers
- Closing Costs on a House: How Much Will I Pay? (2024 Update)
- The Mortgage Underwriting Process: A Complete Guide
Disclaimer:
This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any decisions about your finances.
See What You Qualify For
This process varies from lender to lender. Some lenders will verify your employment with your employer either over the phone or through a written request. Then, about 10 days before your scheduled closing, re-verify your employment. This is done to make sure nothing has changed with your employment status.
Why Do I Need A Verification Of Employment?
Customers are frequently perplexed by this double verification since it appears like extra work that is delaying their loan application. However, in order to ensure that you qualify for a loan before you spend a lot of time in the process, we are verifying your employment as soon as possible. We then recertify your employment right before closing to make sure nothingâs changed.
We must verify your employment again because a change in employment may impact your ability to pay your mortgage each month. This is the reason we always advise our clients not to apply for a mortgage while they are changing jobs or taking out a new credit card or auto loan.
Your lender will verify your employment, at least twice
FAQ
Do all lenders verify employment the day of closing?
What happens if you lose your job right after closing on a house?
Can you be denied a loan after closing?
How do lenders verify previous employment?
Do mortgage lenders verify employment on closing day?
One step in the underwriting process is the verification of employment (VOE). The mortgage lender needs to check that you are and have been employed to ensure they’re taking into consideration all of your income sources. This confirms that the borrower can cover their down payment and any closing costs. Do Lenders Verify Employment On Closing Day?
When does a mortgage lender verify employment?
That process happens days to weeks before closing. However, since mortgages can take a month or two to settle, the lender may perform a second verification of employment closer to the closing date, to make sure your circumstances haven’t changed in that time. What Happens if a Lender Cannot Verify Your Employment?
Why do mortgage lenders verify employment and income?
To put it simply, mortgage lenders verify a borrower’s income and employment in order to validate: Why do lenders verify employment and income for mortgages? Lenders verify a borrower’s employment and income to determine the borrower’s ability to repay a home loan.
Should you change jobs before closing a mortgage?
Many lenders will repeat income and employment verifications before closing to confirm nothing has changed. This helps the lender reduce risk of a loan buyback. Borrowers should note: experts generally recommend that they not change jobs during the mortgage loan process if they can help it.