Letter of Employment

A letter of employment on company letterhead, is typically required for mortgage applications as it provides lenders with essential information about a borrower's employment status, job title, and income. This information is crucial for lenders to assess the borrower's ability to repay the loan. It's important to note that a letter of employment is different from an offer letter, as an offer letter is a document that extends a job offer to a candidate, outlining the basic terms and conditions of employment. In contrast, a letter of employment is issued by the employer after the employee has accepted the job offer and is already working for the company.

When lenders receive a letter of employment as part of a mortgage application, they often contact the person who signed the letter to verify the information provided. This verification process is an essential step in the mortgage approval process, as it confirms the borrower's employment status directly with the employer. The lender may ask the employer to confirm details such as the borrower's job title, length of employment, and salary to ensure that the information provided in the letter of employment is accurate and up-to-date.

It is worth mentioning that a letter of employment is considered stale dated after 30 days. This means that if you are using a letter of employment for a pre-approval, you will likely need to obtain a new one once you purchase a home if it has been more than 30 days since the original letter was issued. This ensures that the lender has the most current and accurate information about your employment status before finalizing the mortgage approval process.