What Is A Mortgage Employment Letter?
Mortgages are a crucial part of Canadian life, and getting one can be complicated if you don’t know what to expect. One of the many documents you may be required to provide to your lender is an employment letter. But what is a mortgage employment letter, and what information does it contain?
In this article, we’ll take a closer look at mortgage employment letters (also called a letter of employment or a job letter) and explain what they’re used for and how to get one. So if you’re planning on buying a home in Canada, be sure to read this!
What Is A Mortgage Employment Letter?
A mortgage employment letter is a document used by lenders in the mortgage application process to confirm your employment status. When you apply for a mortgage, the lender will likely ask for proof that you’re employed and can make payments on the loan; it’s actually a pretty common request.
This document provides this assurance; it confirms your salary, job title and length of employment with your current employer.
In most cases, lenders require a mortgage employment letter that’s been prepared by your employer. It should include their company name and contact information, as well as your job title, salary and length of time employed.
Bank statements don’t work as proof of income, since the transactions are not solely dependent on your employment. Now, mortgage employment letters are not always required; some lenders may accept pay stubs or other forms of proof instead. However, an employment letter is the most reliable way to prove your employment status, so it’s always best to provide one if you can.
Why Do I Need A Mortgage Employment Letter?
Mortgage lenders want to make sure you are financially stable to make payments on your loan. To do this, they need to be able to verify employment status and income. A letter of employment allows the mortgage lender to verify other information such as your employer information, current employment status, annual salary or if you’re paid hourly, the wage rate.
A mortgage employment letter serves as proof of your income and job stability; it shows that a reputable employer has officially verified these things.
In addition, mortgage brokers may want to know if you’re in a permanent or temporary position and what your job title is. The information in this employment verification document can help them decide how much of a risk it would be to approve your loan.
A letter of employment really is a key document in the mortgage process to determine possible mortgage rates, ensure you have a reliable income source and help complete your mortgage application.
What Should Be Included In A Mortgage Employment Letter?
Most people will talk to the human resources department to get their letter of employment. A mortgage employment letter should include the following information:
- Your full name and job title
- The contact details of your employer including company name, address and contact information
- Start date of your current position
- Annual salary or wage rate you’re making in your current position
- Length of time you’ve been employed with this employer
- Your work schedule, including any days and hours you are expected to work
- Any other relevant details regarding your job, such as bonuses or commissions
Ideally, the letter should be on official company letterhead.
Fill out the form below to get a blank employment letter template emailed directly to you (you’ll be able to choose either Word or Google Doc format):
How Do I Get A Mortgage Employment Letter?
If you need a mortgage employment letter, the best place to start is with your employer. Ask them if they can provide you with one; it should include all the relevant information mentioned above. You may also need to provide a written request or authorization for your employer to release this information.
Once you have the letter, make sure to double-check that all of the information is correct and accurate before submitting it to your lender. If there are any discrepancies, they could delay the approval process or even result in your loan being denied.
Do All Lenders Require A Mortgage Employment Letter Before They’ll Approve A Loan?
No, not all lenders require a mortgage employment letter. Some may accept other forms of proof, such as pay stubs or bank statements. However, it’s always best to provide a letter if you can; it provides the most reliable and comprehensive information about your employment status.
What If I’m Self-Employed?
If you’re self-employed, you still need to provide proof of income. This could include tax returns, financial statements and/or bank statements or other documents that show your average monthly income. You may also need to provide a letter from your accountant verifying the financial information; this is similar to a mortgage employment letter but with different details related to your business and finances. The details here vary depending on what your mortgage broker asks you to provide.
Getting a mortgage loan can be a complicated process, and having the right documentation is essential. If you’re asked to provide such a letter, make sure that all of the information is accurate before submitting it to your lender. This will help ensure that the approval process goes smoothly and you get the loan you need.
About the Author:
At Sterling Homes, our mission is to provide the opportunity for affordable homeownership without compromise. Over the last 70 years, Sterling Edmonton has quickly become one of Edmonton’s most popular builders. We bring more than seven decades worth of exceptional customer service, superior design and unparalleled craftsmanship to the greater Edmonton area. As a member of the Qualico Group, Sterling Homes focuses on greater Edmonton’s finest family communities, while being able to offer some of the region’s most family friendly prices thanks to volume purchasing power for materials, trades and land. This has not only made Sterling one of Edmonton’s bestselling, move-up builders, but also one of the industry’s most respected home providers. It is through our uncompromising commitment to our customers that we proudly deliver the Sterling Advantage – that’s why each and every home we build includes a 10-year home warranty, a completion guarantee and new home warranty excellence rating. Our Advantage is our pledge that, when you build your dream home with Sterling, we will deliver a timely, well-built home you’re sure to enjoy for years to come.
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