What Is a VOE in Real Estate for a Mortgage?

A Verification of Employment (VOE) is a key document in real estate transactions, particularly when securing a mortgage. This official record is important in the lender’s evaluation process, providing a clear snapshot of a borrower’s financial standing. It helps mortgage lenders verify the stability of an applicant’s income and employment history. The VOE directly influences the lender’s confidence in an applicant’s ability to meet their repayment obligations.

Understanding the Verification of Employment

A Verification of Employment is a formal document requested by mortgage lenders to confirm a borrower’s current employment status and income stability. Its primary purpose is to provide an independent verification of the financial information supplied by the borrower on their loan application. Lenders rely on this document to confirm the consistency and reliability of a borrower’s earnings, which is a key factor in determining their eligibility for a mortgage. The VOE is completed by the borrower’s employer and sent directly to the lending institution.

Lenders integrate the VOE into their underwriting process to assess the risk associated with extending credit. This process involves a thorough review of a borrower’s financial profile, and employment verification is a significant component. By confirming employment and income, lenders gain assurance regarding the borrower’s ability to make consistent mortgage payments over the loan term. The document confirms that the income reported by the borrower is accurate and sustained, reducing risks for the lender.

Information Included in a VOE

A Verification of Employment form details key information about the borrower’s employment. This includes their employment status (full-time, part-time, or temporary), job title, and department. The start date of employment is also included, which helps lenders assess the borrower’s job stability and tenure.

The VOE also provides details about the borrower’s current income. This includes their base salary or hourly wage, along with any additional regular compensation such as commissions, bonuses, or overtime pay. The frequency of pay (weekly, bi-weekly, or monthly) is also noted. The form includes a section where the employer indicates the likelihood of continued employment, indicating future income stability. All these details are cross-referenced by the lender to verify the borrower’s stated financial capacity and ability to manage mortgage payments.

The VOE Process for Borrowers

The process for a Verification of Employment begins after a borrower submits their mortgage application. Once the lender reviews the initial application, they initiate the VOE request. The borrower provides explicit consent for the lender to contact their employer for this purpose, via a signed authorization form. This consent is a necessary step, ensuring compliance with privacy regulations before any employment information is released.

After receiving borrower consent, the lender sends the VOE form directly to the borrower’s employer. The employer completes the form, providing the requested employment and income details, and returns it directly to the lending institution. This direct communication channel helps maintain the integrity and accuracy of the information. Prompt and accurate completion by the employer is important, as delays or discrepancies in the VOE can affect the mortgage loan approval timeline. Inaccurate information may necessitate further clarification and delay loan finalization.