What is the main benefit of a Verification of Employment for lenders?

The main benefit of a Verification of Employment for lenders is that it confirms the borrower's financial stability and income. When a borrower applies for a mortgage, the lender needs to verify that the borrower has a reliable source of income to ensure they can afford to make loan payments. The Verification of Employment serves as an important tool to validate not only the current employment status but also the borrower’s earnings. This information is crucial when assessing the debt-to-income ratio and overall financial picture of the borrower, making the lender more confident in their decision to approve the loan.

While assessing a borrower’s credit score, providing documentation of loan terms, and outlining closing costs are essential aspects of the mortgage process, they do not address the specific need for validating income and employment status, which is pivotal in evaluating the borrower's ability to repay the loan.