Verification of Employment is one of the steps involved in the VA home loan process. Lenders perform this essential task because it assures you will be able to make your mortgage payments. If this is your first time purchasing a home with a VA loan, you may be wondering what this process entails. Here’s everything you need to know.
What Is Verification of Employment?
Verification of Employment (VOE) is a standard procedure that involves confirming an individual’s employment status and place of work. For the purposes of a VA home loan, it is used to determine a borrower’s stability and income history. This assures the lender that the borrower will, in fact, be able to repay their loan.
How Do Lenders Verify Employment for a VA Home Loan?
VOE guidelines vary from one lender to the next. The process also varies depending on whether the borrower is currently active in the military, soon-to-be-discharged, or retired.
Verbal Verification of Employment
If you have a single source of income from which you receive regular paychecks, then your lender will most likely conduct a verbal verification of employment. This means they simply call your employer and get a verbal confirmation from a representative that you are employed at your place of work.
Written Verification of Employment
In some cases, a lender will require written verification of employment. Usually, this step is taken when a borrower has multiple sources of income. It may also be used when a borrower is on a temporary leave of absence from work or currently receives handwritten paystubs.
Self-Employed Verification of Employment
If you run your own business and are self-employed, your lender will conduct a slightly different process for your VOE. In this case, your lender will want to verify the existence of your business through either your accountant or a government agency. Then, they will want to confirm your business address and phone number.
VOE for Active Duty Military
If you are currently serving in the military under active duty, your lender will use a slightly different process to confirm your employment status. Instead of obtaining a traditional VOE, they will want a document called a Leave and Earnings Statement (LES). This document provides detailed information about your pay and leave status.
VOE for Military Nearing Discharge
If you will be discharged from the military within 12 months of your closing date, your lender will use a different process for your VOE. This is because they want assurance that you will be able to make your VA home loan payments after you leave the military.
There are many methods that lenders use in these types of situations. If you have been offered a normal civilian job, then your lender will want proof of your offer of employment. Or if you have decided to extend your active duty service, then they will request specification documentation as well.
If you are unable to provide either of these, then your lender may resort to other methods such as asking you to compensate for uncertainty with a larger down payment.
Have Questions About Your VOE?
Verification of Employment is a standard process conducted during all VA home loan applications. If you have questions about this process or your particular situation, please do not hesitate to contact our office. We will be more than happy to assist you.