There are many ways that income verification can help your loan approval. If you have a history of job loss or a recent layoff, your lender may require an additional income form to add to the paperwork they provided you with in order to secure your loan.
A lender may use the information on the income verification to determine whether you qualify for some loans and for some types of credit cards. Here are five reasons that this information may impact your loan application:
Are You Applying for a Mortgage?
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If so, income verification will help your lender decide if you can afford to make your monthly payments. If you do not provide enough information to support your mortgage, you could be disqualified from receiving a mortgage. The lender is also likely to check employment histories and current employment status before granting any type of loan. This may affect the loan type that you apply for.
Are You Applying for Student Housing?
A lender may request employment verification in order to determine whether you are a suitable candidate for any type of financial assistance. For example, a lender might require you to submit a formal employment verification package when you apply for a federal loan.
Federal student housing loans are guaranteed by the federal government. A lender may refuse to grant you a loan if you cannot prove your identity or you do not have a verifiable employment history.
Are You Working as a Telecommuting Employee?
Most telecommuters are not granted regular employment status and therefore are not considered qualified for employment verification.
If you have difficulty proving your current employment, your lender will most likely require you to submit an employment verification package, which contains basic information about your employment and salary.
Even if you are hired as a telecommuting employee, a lender may still require a formal employment verification package.
Do you Plan to Change Jobs in the Future?
Consider your future job history when filling out the income verification package. For example, if you plan to move and you receive a job offer that is larger than your current income, you may need to add this new income to your existing income package in order to make your loan application process complete.
Your lender may require you to submit a pay stub with your new employment, which is a perfect time to include your income verification statement. Seasoned accounting professionals at mrpaystubs.com/ advise that this document is vital because it is often easy for a loan officer to make a mistake when manually entering your data; including your income verification statement with your employment information will catch any mistakes.
Are You Applying for a Federal Loan That is Based on an Income Level?
If so, a lender will not consider you to be a good candidate for a loan if you do not provide proof of your income. Your income verification package should contain all of the basic information about your income and expenses.
Are You Applying for a Private School Loan or a College Student Loan?
A lender will consider your income level to determine whether you qualify for the loan. Your lender will also consider if you are a good candidate for the loan if you are not employed. For instance, if you are not employed and you are applying for a student loan, your lender will not consider your income verification package.
What Are Your Options When Income Verification Isn’t Possible?
The bulk of the profits for most borrowers are salaried income, so it is imperative that they are able to provide a further form of evidence of continuing income. A structured work and income review typically take the form of a job check letter or a state-specific form.
If the employee cannot receive such a letter, either because of poor relationships with the employer and due to the fact that the organization has no mechanism for performing such an evaluation, other methods might be necessary to demonstrate a profit. They include:
- Pay Stubs
- Credit History
- Bank Statements
- References
The information in this article is designed to be used for reference purposes only. It should not be used as, in place of, or in conjunction with professional financial advice relating to any loan product. For additional information on applying for a federal loan, private student loans, or a home equity line of credit, please visit the websites of the appropriate loan.
You can learn more about your options for a college education, reduce your cost of tuition, and more. You can complete a free online loan application today. Don’t forget, the sooner you get approved for your loan, the better your chances for a higher paying job and a higher standard of living.
