How to get a letter of employment for a mortgage
A lender will need to verify your income before approving a home loan
Applying for a mortgage can seem overwhelming, but it doesn't have to be. Knowing ahead of time what documentation you'll need to provide can make the process go more smoothly.
You’ll typically need to give your lender bank statements, investment statements, tax returns and proof of income, like W-2s, pay stubs and a letter of employment.
If you have any questions about the mortgage application process, contact your lender as early as possible. By proactively communicating, you’ll be better equipped to get all the documents your lender needs to approve your loan.
Key insights
- A letter of employment is a document from an employer verifying an employee's employment status and income stability.
- Employees can request a letter of employment from their employer, or lenders may work directly with employers to get it.
- Self-employed individuals typically must supplement a self-employment letter with third-party income documentation, like tax returns.
What is a letter of employment?
A letter of employment is a document from an employer that verifies an employee's employment status. It typically includes the employee's name, position, salary and length of employment.
Mortgage lenders require letters of employment for a couple of key reasons:
- It helps them assess your creditworthiness. A steady income is a key factor in helping lenders evaluate the likelihood you will repay a loan.
- It helps lenders assess your financial stability. A long-term job with a steady income indicates if you’re able to afford the monthly loan payments.
If you’re applying for a loan, get a letter of employment from your employer as soon as possible after your lender requests it. This will help ensure your loan application moves through the underwriting process and your pre-qualification or preapproval isn’t delayed.
How to get a letter of employment
Getting a letter of employment depends on what type of employee you are.
- If you’re employed by an employer
- In many cases, your lender will work directly with your employer to get a letter of employment. You won’t need to do anything except give your lender your employer’s contact information.
If your lender wants you to get the letter from your employer, you can typically work with your human resources department to obtain a letter confirming your employment.
Be sure to have your employer include the following information in the letter:
- Your name
- Your job title
- Your start date
- Your salary and other compensation (e.g., bonus, commission)
- Any other relevant information your lender requested
Your employer should be able to provide you with a letter of employment within a few days.
- If you’re self-employed
- If you’re self-employed and your lender asks you to provide a letter of employment, you should state in the letter that you are self-employed and provide the following information:
- Your name
- Your business name
- The date you started your business
- Your annual income
- A description of your business
- Any other relevant information
Once you’ve written the letter, sign and date it and submit it to your lender.
What to include in a letter of employment
Make sure your letter of employment includes the following information:
- Your name and job title
- The name and address of your employer
- Your start date and length of employment
- Your salary and other compensation (e.g., commissions, bonuses)
The letter should be on your employer's letterhead and signed by a company official, such as someone in the human resources department.
While it may be tempting to just write your own employment letter, it’s not ideal. Many lenders may not consider a letter you’ve written meaningful since there’s no third party to verify the information, explained Dennis Shirshikov, the head of growth at Awning, a company serving rental property owners.
Note that a letter of employment doesn’t guarantee you’ll be approved for a mortgage loan. However, it is required to help the lender assess your ability to repay the loan. If you have any questions, contact your lender.
» MORE: Best mortgage lenders
Letter of employment example
Each letter of employment will look different, depending on your employer’s processes and systems and your mortgage lender’s requirements. For example, for conventional loans backed by Fannie Mae, your employer may need to complete a specific Request for Verification of Employment form. Your lender will let you know exactly what’s required.
If your lender doesn’t require a standard form, you can expect a letter of employment to look something like this:
[Your Company’s Name,
Address and Phone Number]
[Date]
[Name of Mortgage Lender
Name and Address of Mortgage Company]
Dear [Name of Mortgage Lender],
I am writing to provide you with a letter of employment on behalf of [Your Name]. [Your Name] has been employed by [Your Company’s Name] as a [Your Job Title] since [Date]. [Your Name's] annual salary is $[Your Annual Salary].
Please let me know if you have any further questions.
Sincerely,
[Signature]
[Name, Title and Contact Information of Your Company’s Representative]
FAQ
Can I write my own letter of employment?
Typically, a letter of employment for a mortgage must come directly from your employer to be deemed valid and credible. Writing your own letter is generally unacceptable. This is because the letter helps your lender obtain third-party verification of your job status and income.
Can a lender call my employer for proof of employment?
Yes, in many cases, a lender can contact your employer to verify your income, employment and time on the job as part of the loan application process. However, they will typically obtain your consent before doing so.
Do you need a letter of employment for renting?
Whether you’ll need a letter of employment to rent a residence depends on the landlord or property management company’s requirements. Some may request a letter of employment to verify income and stability before approving a rental application. Others will not.
Bottom line
A letter of employment is a formal document employers provide to verify an employee's current employment status. It contains essential details such as the employee's name, position, salary and length of employment with the company.
Lenders often require this letter to assess borrowers' creditworthiness and financial stability before approving mortgage loans. While providing the letter does not guarantee loan approval, it is crucial for the lender's evaluation process.
- Article sources
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Fannie Mae, "Request for Verification of Employment." Accessed July 21, 2023.
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