What is Mortgage Verification?
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Summary:
A verification of mortgage, or VOM, is a document that details your previous mortgage history. Lenders like to see your previous mortgage habits, as this gives them a good idea about your risk profile when they are gauging whether or not to offer you a loan and on what terms. Requesting a VOM from a previous lender is easy and should only take a few days to receive.
If you have a mortgage but are in the process of selling your house and buying a new one, a lender will want to see your mortgage history. If you have any mortgage-related skeletons in your closet, you might want to check on them, as your lender could see them when they request a mortgage verification or VOM. You might be familiar with a lender’s request for verification of employment, which is often part of the approval process. Similarly, there is also a mortgage verification process that lenders may require to approve a mortgage. Learn more about this process and the required documents below.
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What is mortgage verification?
When lenders walk prospective clients through the mortgage process, they look at items like your credit report, assets and liabilities, income, and past mortgage statements. However, they might want to have a more detailed view of your mortgage history, specifically with your most recent lender and even lenders from the past.
In this case, they will ask for a document called a verification of mortgage that needs to be obtained from the lender of the last mortgage or mortgage in question. The documents are used to ensure the borrower’s mortgage history is up to snuff and could include the following.
Mortgage status
Do you owe anything to the lender or have problems with the mortgage servicer? What is your current debt-to-income ratio? Besides your upcoming mortgage payment, are there any other payments you owe, such as late fees or penalties? If you did miss a payment, did you pay it back a couple of days or a couple of weeks later? Are you paying homeowners insurance premiums and property tax along with your mortgage? A bank will want to see your current mortgage status to make sure they are not dealing with a serial mortgage loan delinquent.
Pro Tip
A lender is also going to want to see the status of your current mortgage if you have not sold the property to ascertain the structure of your mortgage. If it’s a fixed-rate mortgage, this is pretty simple. But if it’s an adjustable-rate mortgage or ARM, this is another story. For those whose existing mortgage is a non-conforming loan (which means it’s not Fannie/Freddie-backed), it can be even more complicated.
Balance of loan
The balance is how much you still owe on your mortgage. It is also referred to as the unpaid principal balance. If you are selling or have sold the home, the lender likely will not care. But if you are looking at getting another property on top of your existing mortgage, the lender will want to know your balance on the current property.
Monthly mortgage payments and payment history
A lender is going to want to see the monthly amount that you pay for your mortgage. Again, if you are selling or have sold the property in question, this doesn’t matter as much. However, if it’s an additional property, a lender is going to want to see your payments and monthly history. Again, this holds particularly true if the mortgage was not a fixed-rate mortgage or a conforming loan.
Requesting a mortgage verification or VOM
The person or company from whom you will request a VOM is the lender that gave you the mortgage you wish to verify. Follow these steps to request a VOM:
1. Contact the lender.
2. Send them a form or a document with questions related to mortgage verifications. Some of these questions will include:
- Origination date
- First interest rate
- First original amount
- Next payment date
- Payment amount with escrow
- Loan type
- Payment history
3. Once you have the form, submit it to your new lender.
You will need to verify more…
If you are getting a loan, then your VOM is only one piece of the puzzle. Lenders will want to know more about your financial history, such as employment and income information. You will need probably need to verify the following:
- Credit report/score/FICO score
- Gross monthly income from your current employer and any side jobs
- Employment verification and history
- Assets and liabilities
Pro Tip
Benjamin Ivory, a real estate attorney in Chicago, says that you might need to provide legal documents as well. “In certain areas, such as big municipalities like Chicago, there can be more required than you would think,” Ivory says. “If you have questions about what you need to produce or are not sure, it’s best to speak to a real estate attorney.”
Time frame for a VOM
Once you contact the lender, they have:
- 5 days to respond in writing
- 30 days to successfully process the request
In some circumstances, there might be issues out of the lender’s control that make the process take longer. However, this is the basic approximate time frame.
If you’re ready to start gathering documents to apply for a mortgage, you’ll want to compare lenders to find the best rates.
FAQ
Where can I get a mortgage verification?
You can get a mortgage verification from the lender who offered you the mortgage you are attempting to verify. It’s pretty easy to do, and most lenders will have the forms and required information on hand.
How long does verification of a mortgage take?
A lender must respond in writing within five days and they then have 30 days to produce the requested items.
How do mortgage lenders verify?
Mortgage lenders verify mortgage history through a VOM. They verify income and employment with documents like contracts, pay stubs, employer payment history, bank statements, and more.
What do banks check before approving a mortgage?
Banks check as much as they possibly can as it relates to your finances and financial history. To determine your risk profile, they may ask for income verification, credit scores and credit history, bank statements, and information about your previous mortgages.
Key takeaways
- Verification of a mortgage, or VOM, is a document that proves your previous mortgage history.
- Whether you are self-employed or work for a large company, lenders want to see your financial history, including your mortgage history.
- The information that you will need to provide for a VOM might include your payment history, loan status, and the balance of the loan.
- A VOM is only one piece of the puzzle; lenders will want to see various other documents verifying your income and employment status.
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