5 ms·

Ask HR how you should verify your employment and salary for a mortgage application. I know my company intentionally shares since they ask you to use the work nu

by Cerium 5y ago

Ask HR how you should verify your employment and salary for a mortgage application. I know my company intentionally shares since they ask you to use the work number to send a verification to the lender.

BeefySwain 5y ago
Great idea!
cortesoft 5y ago
Yeah, I used the work number thing to verify my salary for my mortgage.
- hypothesis 5y ago
  As in you had to interact directly with work number for that? Or do you mean that lender “magically” knew and pre-populated your salary info during application process?
  - newtwilly 5y ago
    Not the parent, but my lender magically knew with just my name, position, company, and SSN. FWIW
  - cortesoft 5y ago
    No, I contacted my work to get my ‘work number’, and then gave that to my mortgage lender.
dboreham 5y ago
The whole "verify your salary with employer" process is BS. Lenders can verify income by requesting your tax returns, and N recent pay stubs (source: I own my employer and have verified income this way, since obviously they are not going to call myself up and ask me to verify my own income). This is only about reducing their verification costs. If there needs to be a giant database of everyone's income, the government should run it, and they already have the data.
- MichaelBurge 5y ago
  If you verify with tax returns, it would be easy to borrow money from a friend and count it as income every year just for loan qualification. And then borrow more money from a bank, wait 6 months for seasoning, and use it as down payment to buy real estate. And if the loan gets sold to the government, it needs to meet government underwriting criteria and the lender has no free will. Especially for residential mortgages: No private business cares about 3% interest on a loan, they sell those to the government and make money on the origination fees. If you get a hard money loan, they'll only ask for tax stubs but you'll also pay 10-12% interest. If the buy is really good sometimes they don't even care about taxes or ability to repay - they get your equity if you default so who cares if you make a dumb decision? It's mainly the government loans where they really try to avoid defaults.
  - nixgeek 5y ago
    10-12% is higher than my credit card APR is that really what hard money loans are going for now?!
    - lupire 5y ago
      The US average is a above 16%.
  - Thorrez 5y ago
    >If you verify with tax returns, it would be easy to borrow money from a friend and count it as income every year just for loan qualification. Huh? Isn't it fraud to declare something as income that's not actually income? Also, if you declare something as income, don't you have to pay tax on it? So this scheme will mean you have to pay a bunch of taxes you wouldn't have to otherwise. This sounds like the opposite type of fraud people do. People usually under-report income, not over-report it. "Yes IRS, I made $1T last year." "Ok cool, send us $400B in taxes please."
    - MichaelBurge 5y ago
      > Isn't it fraud to declare something as income that's not actually income? Mortgage fraud is a thing that exists, so it's not like labeling it as a crime lets you forget about it. > don't you have to pay tax on it? If you're borrowing at 30x leverage like some government loans give, taxes on the down payment is a small increase in cost-of-leverage which is more than made up for by the reduced interest rates. Anyways, my point is, there's good reason to look at the same income viewed in multiple ways. Adding an employer into the mix is at least a separate person(which is probably why they waived the requirement in OP's case), while tax returns are filed by the potential fraudster/"entrepreneur".

by Cerium 5y ago

BeefySwain 5y ago

Great idea!

cortesoft 5y ago

Yeah, I used the work number thing to verify my salary for my mortgage.

hypothesis 5y ago
As in you had to interact directly with work number for that? Or do you mean that lender “magically” knew and pre-populated your salary info during application process?
- newtwilly 5y ago
  Not the parent, but my lender magically knew with just my name, position, company, and SSN. FWIW
- cortesoft 5y ago
  No, I contacted my work to get my ‘work number’, and then gave that to my mortgage lender.

dboreham 5y ago

The whole "verify your salary with employer" process is BS. Lenders can verify income by requesting your tax returns, and N recent pay stubs (source: I own my employer and have verified income this way, since obviously they are not going to call myself up and ask me to verify my own income). This is only about reducing their verification costs. If there needs to be a giant database of everyone's income, the government should run it, and they already have the data.

MichaelBurge 5y ago
If you verify with tax returns, it would be easy to borrow money from a friend and count it as income every year just for loan qualification. And then borrow more money from a bank, wait 6 months for seasoning, and use it as down payment to buy real estate. And if the loan gets sold to the government, it needs to meet government underwriting criteria and the lender has no free will. Especially for residential mortgages: No private business cares about 3% interest on a loan, they sell those to the government and make money on the origination fees. If you get a hard money loan, they'll only ask for tax stubs but you'll also pay 10-12% interest. If the buy is really good sometimes they don't even care about taxes or ability to repay - they get your equity if you default so who cares if you make a dumb decision? It's mainly the government loans where they really try to avoid defaults.
- nixgeek 5y ago
  10-12% is higher than my credit card APR is that really what hard money loans are going for now?!
  - lupire 5y ago
    The US average is a above 16%.
- Thorrez 5y ago
  >If you verify with tax returns, it would be easy to borrow money from a friend and count it as income every year just for loan qualification. Huh? Isn't it fraud to declare something as income that's not actually income? Also, if you declare something as income, don't you have to pay tax on it? So this scheme will mean you have to pay a bunch of taxes you wouldn't have to otherwise. This sounds like the opposite type of fraud people do. People usually under-report income, not over-report it. "Yes IRS, I made $1T last year." "Ok cool, send us $400B in taxes please."
  - MichaelBurge 5y ago
    > Isn't it fraud to declare something as income that's not actually income? Mortgage fraud is a thing that exists, so it's not like labeling it as a crime lets you forget about it. > don't you have to pay tax on it? If you're borrowing at 30x leverage like some government loans give, taxes on the down payment is a small increase in cost-of-leverage which is more than made up for by the reduced interest rates. Anyways, my point is, there's good reason to look at the same income viewed in multiple ways. Adding an employer into the mix is at least a separate person(which is probably why they waived the requirement in OP's case), while tax returns are filed by the potential fraudster/"entrepreneur".