March 5, 2015
If you are considering an application for an FHA loan or an FHA refinance loan, you might wonder about some of the details of your application. One area some get concerned over is the income and employment section–specifically how the lender will verify both income and employment.
When it comes to your income, the lender will request pay stubs–your most recent verification of deposit or other proof of income that can function as a pay stub. In most cases the lender will request documentation that is the most current, but in some cases can be no more than 120 days old.
For employment verification, the lender will contact the employer (or request added documentation if you are self employed). According to the FHA loan rules found in HUD 4155.1, the employer can submit information via U.S. mail, but also by fax or by internet. In cases where the documentation is submitted by fax/internet, the lender is required to have information that clearly displays the critical details.
“Income, employment, or asset documents sent to the lender by fax must clearly identify the
• name of the employer or depository/investment firm and the source of information, and
• name and telephone number of the individual at the employer or financial institution responsible for verifying the accuracy of the data.
The lender is accountable for determining the authenticity of faxed documents by examining the information included at the top or banner portion of the fax.”
Likewise, the FHA loan rules in this section state, “income/employment or asset documentation from an Internet website must clearly identify the employer or depository/investment firm’s name, as well as the source of information.
Documentation from an Internet website for depository accounts must provide the same information as a standard original statement, including
• account holder
• account number
• detailed transaction history, and
• account balance.”
As you can see, when you apply for an FHA loan or refinance loan, detailed information is required from a variety of sources to establish you as a good credit risk. That’s why borrowers are advised to give themselves plenty of time to prepare for the loan application process-gather your data and your documentation and you’ll be better prepared to apply.
Do you have questions about FHA home loans? Ask us in the comments section. All comments and questions are reviewed prior to posting.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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