Home Buying in Michigan>Question Details

Erinmarie, Home Buyer in Michigan

Are banks still accepting a signed letter of salary from employer as a way to verify income? Our mortgage

Asked by Erinmarie, Michigan Wed May 6, 2009

broker gave us a letter for my husbands employer to fill out after our co-buyer fell through. He has great credit and we have a 35% downpayment in cash. No debt. He mostly makes tips for his income so his W2 is pretty low. This is the only thing holding us back from getting approved. We are hoping this form will work...is there any chance of that happening?

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okay, thanks for all the feedback.
0 votes Thank Flag Link Fri May 8, 2009
Hi, Erin Marie!

Three years ago, this would have not been an issue. Today it is an issue, but not necessarily impossible.

I work with a very resourceful, creative loan officer. If you would like to connect with me outside of this forum, I can provide you more information. Via my Trulia profile, or email Derek@DoorToDreams.com.

Enjoy your day!

Derek Bauer, Associate Broker
Real Estate One
Web Reference: http://DoorToDreams.com
0 votes Thank Flag Link Thu May 7, 2009
Thanks Vicky for the feedback. I was under the impression he was only "supposed" to claim 10% of his tips, but obviously I was wrong. We are just going by what the mortgage guy told us since he said we need to show more income. I feel really stupid..I just thought that was how it was for all serving jobs! Does it get reported to the IRS? Like I said, I am clueless to how this all works.
0 votes Thank Flag Link Wed May 6, 2009
Erinmarie - oh... If the employer signs something that says your husbands income is above what has been reported to the IRS, then not only is there evidence of tax evasion on the part of your husband, but of coersion on the part of his employer.

It may very well work - I see stuff like this all the time. But, I dont think it should work. As an underwriter, I wonder why someone would think that a letter like this from an employer - who could more easily lie in this letter than on the paperwork reported to the state and fed govt monthly - would be acceptable. But, like I said, I see this bewildering stuff all the time. But, I'd hold my breath until after closing.

My opinon - your husband needs to claim all his tips. Yes, i was once upon a time a waitress. No, no one else in the restaurant claimed their all tips - they told me not to; even said it would be an audit flag for everyone else... you see, they had a system. I reported all my tips.

Just because other people break the law on a regular basis does not mean it's OK. And, yes, I practice what I preach.
0 votes Thank Flag Link Wed May 6, 2009
Thanks Michelle. It's just so frustrating since everything else would be perfectly in order to get a loan. We will try but aren't holding our breath...
0 votes Thank Flag Link Wed May 6, 2009
Hi Erin Marie,

People who work for tips are a hard people to get a loan for unless they claim everything at tax time. Your lender sounds like he/she is trying. This form is usually called a VOE..........Varification of Employment, and it will help..........but a tough road if your W2 does not match. Good Luck!
0 votes Thank Flag Link Wed May 6, 2009
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