Verification of employment (VOE) typically covers the most recent how many years?

Verification of Employment (VOE) is a crucial step in the mortgage application process, as it helps lenders assess a borrower’s employment stability and income reliability. The standard practice for VOE is to examine the most recent two years of employment history. This period is significant because it provides a fair indication of the borrower’s current job stability and overall earning potential without being overly influenced by distant past employment that may no longer be relevant to the borrower’s current financial situation.

By reviewing employment history for the last two years, lenders can gain insight into any potential job changes, gaps in employment, or upward trends in income, all of which play an important role in evaluating the risk associated with granting a loan. This two-year standard aligns with guidelines established by various regulatory agencies and industry standards, ensuring a balanced perspective on a borrower’s employment history without overwhelming complexity from too extensive of a timeframe.