Getting a loan for a home can be a stressful process. Read on to learn about employment verifications before, during, and after the closing process. Learn how working with a top agent can reduce the amount of strife associated with buying a house.
You want to borrow hundreds of thousands of dollars to buy a house. Hundreds of thousands of dollars. It will take you decades to pay back this amount of money. Your lending institution would not only be prudent to check out your financial background, but they are required to do so.
Work with a top agent to ensure your employment verification process goes smoothly, along with the rest of your buying process.
One of the steps your mortgage company has to check off when processing your loan is the Verification of Employment (VOE). Here’s how the process works.
First Verification of Employment
The first step to take when you are interested in purchasing a home is to connect with a Clever Partner Agent in your local area who will help you through the process.
The second step in buying a home is to choose a mortgage company and go through the pre-qualification process. You will give the company an overview of your financial outlook and history, and the company will provide you with a general idea of how much you can comfortably spend on a home.
Even though the lending company has pre-qualified you for a loan that does not mean you are free to put an offer on the first house you see. The next step of the process is that your loan will go through pre-approval. At this time, a mortgage company employee will do a VOE.
While you may have given the mortgage company the name, phone number, and address of your employer, your lender is required to verify the phone number through Google. This means the borrower is not able to give the lender a phone number that is answered by a friend who poses as the employer. During this phone call, the lender will note the name of the employee who verifies employment, and their title and phone number.
Once the VOE is complete, and the other aspects of your credit history are verified, you then are pre-approved and can make an offer on the home of your dreams.
Second Verification of Employment
Most mortgage companies will go through a second VOE about ten days before closing. Remember, you are borrowing hundreds of thousands of dollars, and your lender wants to make sure you are still earning enough to make your house payment.
If you are considering a job change, you should not do it while purchasing a home.
As a side note, if you make other large purchases on a credit card while waiting to close on a house, you may disrupt the loan process as well. That purchase of a new couch on a credit card may tip the scales enough that your debt-to-income ratio becomes a concern for your potential lender.
Third Verification of Employment
Sometimes lenders do a third VOE after closing. There may be a variety of reasons for this.
First, it could be that the mortgage institution is undergoing an audit. Perhaps a third party is checking that the mortgage company employees took all the proper steps to verify the information on your loan application.
Another reason your lender may do a VOE after closing is that the company is selling your loan. This is a common practice in the mortgage industry. Your new lender, who wants to make sure they are purchasing a mortgage that will actually be paid, may complete the third VOE.
What Happens When You Change Jobs
Sometimes job changes can’t be avoided. If you lose your job while you are in the process of buying a home, make sure you tell your mortgage company as soon as possible. As soon as you have new employment, give the contact information to your lender so the VOE process can begin again.