Getting your letter of employment for a mortgage
One of the most tedious parts of the home buying process can be providing documentation to your mortgage lender in order to get approved for your mortgage.
At Perch, we’ve tried to make this process as easy as possible, automating most of the review process and allowing you to upload all of your documents on our portal. Regardless of who you get your mortgage with, you will inevitably end up having to provide at least some common documentation to prove your income or net worth.
The vast majority of mortgage lenders require proof of income from a borrower in order to qualify that person for a mortgage. If you’re a salaried individual with a regular full-time job you will likely be asked to provide your tax returns for the past year as well as a letter of employment to prove you are currently employed.
For a more detailed overview of all types of documents you might use to prove your income to your mortgage provider, check out this in-depth article.
What is a letter of employment?
A letter of employment is simply a document that verifies your current employment status and income. It is commonly required by mortgage lenders attempting to verify your income. The letter is written by your employer and includes information such as your job title, length of employment, and current salary. It’s also key that the letter states that your employment is ongoing and states whether it is a full-time, part-time or contract position.
Here’s an example of what a letter of employment may look like to you:
Why does my mortgage lender need a letter of employment?
Mortgage lenders will often require a letter of employment to verify the income of the mortgage borrower. Most mortgage lenders have strict lending requirements, and the amount you qualify for is often largely based on your continual monthly income. A letter of employment is a document that confirms your employment status to your mortgage lender.
Mortgage lenders want to verify this info before they lend money so that they don’t lend money to people who have a risk of not being able to pay their mortgage. If mortgage lenders gave out money to everyone without properly qualifying them, many people would default on their mortgage in the result of rising interest rates or an economic downturn, which could have disastrous results on not only the lenders but the whole market.
Where do I get a letter of employment?
Oftentimes you will be provided with a written statement offering you the terms of your employment before you start a new job. This may be in the form of an e-mail or a written letter.
If your employer didn’t provide you with a letter of employment, you should reach out to someone at your place of employment, typically your manager or HR department, who can provide you with one or point you to someone who can.
Can I write my own Letter of employment?
Unless you’re self-employed, in which case you’d need to provide different documentation to your lender, you can’t write your letter of employment yourself. It’s best to contact your manager or HR department at work to get a letter of employment for your mortgage.