For would-be buyers who are still working, VA lenders will need to verify your employment situation before your loan can close.
Verification is at the heart of the mortgage process. Before issuing VA loan preapproval, lenders will usually need to look at paystubs, W-2s and other income documents. But they also want to make sure your employment situation hasn’t changed as your loan closing nears.
While it isn’t terribly common, some prospective borrowers do lose or change jobs in the span between getting preapproved and receiving a Clear to Close. Lenders want to make sure you’re still in position to repay that mortgage on time every month. Any change to your employment and income situation is serious and could derail your VA loan.
Guidelines and policies regarding Verification of Employment (VOE) can vary by lender. There are a couple different ways lenders can verify employment -- verbally or with a more formal written document.
Lenders typically seek to verify how long you’ve been working for the employer, your position at the company and, if needed, income information and the likelihood of continued employment.
Let’s take a closer look.
Verbal Verification of Employment (VVOE)
For many borrowers with a single, consistent income stream, a Verbal Verification of Employment (VVOE) can suffice. This is typically accomplished via a phone call between the lender and a representative from your employer.
At Veterans United, we typically complete a VVOE no more than 10 calendar days prior to closing for all hourly, salary, and commission income borrowers, and not more than 30 calendar days prior to closing for all self-employed borrowers. The date the borrowers sign the note is considered the closing date.
For borrowers who are in the military, a Leave and Earnings Statement (LES) dated within 30 days of closing is acceptable in lieu of a VVOE.
For self-employed borrowers, we will usually do the following within 30 days of closing:
- Verify the existence of the business from a third party, such as a CPA or governmental agency
- Verify a phone listing and address for the borrower's business
Borrowers should keep the VOE in mind as they move through the mortgage process. Some jobs and employment scenarios can pose unique hurdles.
For example, lenders can run into difficulty verifying employment for teachers who want to close on a loan during a holiday break or over the summer. Talk with your loan officer if the nature of your work might make it more challenging to contact your employer.
Full Verification of Employment
There are times when lenders will conduct a full, written verification of employment. This is a more thorough vetting process, often associated with multiple streams of income.
At Veterans United, we would typically seek a full VOE if the borrower is qualifying with multiple types of income, or if there’s a discrepancy regarding the borrower’s dates of employment.
We would also require a full Verification of Employment for borrowers who receive handwritten paystubs or who are pursuing a loan while on a temporary leave from work.
Employment Changes Before Closing
Talk with your loan officer immediately if your employment situation changes during the loan process.
Changes to your employment and income won’t automatically stall your mortgage plans, but lenders will need to take a closer look to assess your ability to repay the loan.