When you apply for a mortgage loan, especially if you are getting a VA loan, you’re going to think we are getting everything except your son’s blood type. There’s a ton of documentation – and there’s at least 10 minutes of silly questions like, “how many years (total) were you in school” that really don’t have much to do with your ability to pay the mortgage back, and serve more for data collection. Employment verification procedures for VA Loans SHOULD be easier than they are…
As a Veteran applies for a mortgage we are collecting credit information, a two year history of current and past residences, and a record of employment… and then we have to PROVE everything you’ve told us. In North Carolina there’s an actual law that requires us to document that at the moment the loan is made – you actually have income sufficient to make the payments.
For credit, we will sometimes try to update your credit report directly with credit card companies and other creditors so that we can use a reduced balance (for instance) to qualify you. So, if you have your credit card statements available, and you just made a big payment, send those to us, or bring them to loan application.
When it comes to prior residences, the previous landlords may be contacted. Because of that, any contact information you have for rental companies can really speed up this process. Go ahead and dig that out before you apply for a mortgage. Please have a telephone number of the rental office handy.
For employment verification we must get in touch with the current employer to verify at least two full years of employment. If you are currently serving, please talk with your Commanding Officer and find out their preference and procedures for verifying employment. For some Security Grades – this has REALLY been a pain in the… a pain, so any upfront help you can give us will be massively appreciated.
VA instructions to lenders say two years must be verified, but not all applicants meet the two-year standard. That’s especially true for those who have recently retired or separated from the military and have begun new careers. What do the VA rules say about employment for less than the full 24 months?
A Veteran is not automatically at risk of having a VA loan application rejected in these situations, but we are going to need to document as much as possible… The VA asks lenders to go the extra step and document what you did prior to your current civilian job. We will also need to see that the current employment in some ways “matches up” with your military training.
According to the VA lender’s guide, if the borrower has not been at the current position for at least two years, the loan officer must “verify prior employment plus present employment covering a total of 2 years, provide an explanation of why 2 years employment could not be verified,” and do a comparison of different types of employment verification. If your current position is paid primarily on Bonus, Overtime or Commissions, we will likely need a full 2 years of income to count those earnings.
When you are submitting LES or Paystubs as proof of current employment, the documents should be the most recent available. The documents expire after four months, so if you are building, it is probable that we are going to need to get updates prior to closing. Keep all bills, paystubs, LES and bank statements CLOSE by until the day of closing. Read: We may ask for them, so don’t pack them away in a box marked “Kitchen.”
If there are gaps in the employment record, the VA will request an explanation of those gaps in writing, so be prepared to explain, but it’s important to note that the VA does take into consideration issues like college or training school attendance; gaps in these cases should not hurt a VA loan application. The underwriter is going to read the documentation and explanations we give them, and approve the loans on a case-by-case basis.
Many Veteran’s don’t realize that there is actually no limit on the number of VA Guaranteed Home Loans a veteran can receive. This typically surprises veteran borrowers who have used the program before. In reality, a Veteran may qualify (in some cases) to borrow for a home using VA Loan benefits for a Second Home (especially if there is a child involved in a divorce).
Because many of the VA mortgage loan requirements are so difficult to wade through, we offer specialized assistance specifically for veteran’s with questions about qualifying for a mortgage loan, and employment verification procedures for VA Loans. Please call Steve and Eleanor Thorne at 919 649 5058