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Who Pays for Verification of Employment in Mortgage Process
I noticed there is a verification of employment in the mortgage process and it runs around $100 to $200 dollars. This an overkill of a fee. Who is responsible for the cost of the COE? Customer, Loan Officer, or Branch Manager/Mortgage Broker Owner?
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2 Replies
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Most of the time, borrowers pay for their Verification of Employment (VOE) or Certificate of Employment (COE) through their employer, and this cost is included in the loan’s closing costs.
Here’s how these costs typically work:
Who usually pays the fee
- You’ll find this fee listed on your loan estimate or closing disclosure as a third-party service fee. It might show up as its own line item, or be grouped under ‘verifications’ or ‘credit report and related fees.’ The borrower pays this as part of their closing costs or through lender credits.
- Usually, the lender or broker pays the VOE vendor up front when they order the verification, since they have accounts with vendors like The Work Number, Truework, Verifier, and Equifax. They then pass this cost on to the borrower at closing.
Loan officers or branch owners rarely pay the VOE fee themselves, since they work on commission and margin. The $100-$200 VOE fee is usually passed straight to the borrower, so it doesn’t affect the loan officer’s pay or the branch’s profit and loss.
- Sometimes, though, the loan officer or broker will cover the fee. Some loan products have a flat fee or ‘no closing cost’ setup, where the lender pays third-party fees as a marketing strategy.
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- In a competitive situation, a loan officer might pay the VOE fee to win the deal.
- Sometimes, brokers will pay part of the lender’s verification fees to make things easier for the borrower.
- If the VOE needs to be done again, like after a job change or a delay, the lender or broker will often pay for the second or third verification instead of charging the borrower again. Paying $100-$200 for another check can seem high, and often it is.
- An automated VOE through the Work Number can cost as little as $5 to $30. A manual phone or written VOE from the employer usually costs between $50 and $150.
- The $100 to $200 fee usually covers the markup, the vendor fee, or a ‘verification package’ that often includes an SSN trace, employment check, income check, and tax transcript check. Some lenders also cover the credit report fee, which can be surprising. Large employers, like big companies, government agencies, or staffing agencies, may pay the vendor directly, which can add to the cost.
Key point to remember
- In most cases, both by law and in practice, the borrower pays this as a closing cost.
- The loan officer, branch manager, or broker owner only pays if they are covering the cost for pricing or marketing reasons, or if it’s a re-verification not started by the borrower. If you’re a loan officer or branch owner and want to avoid looking like you’re overcharging, the simplest approach is to use a vendor like Truework or a direct Work Number integration, which is much cheaper than older verification companies, and just pass through the actual cost instead of using a bundled fee.
If you’d like, let me know if you’re asking as a borrower or as a broker or loan officer. I can then give you more specific advice about who can be billed and how the costs can be set up.
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Your 30-Day Action Plan: Navigating a 566 Credit Score When Custody Matters
It’s vital to understand that the VA doesn’t have a minimum credit score. That’s up to the individual lender. A 566 doesn’t automatically mean you’re going to be turned down. The issue is simply finding a lender who will work with you.
1. Target the Right Lenders (This Week)
The vast majority of lenders will be looking for a score of 620 in 2026. Many will accept 580, and some will go even lower if you have a good enough reason to justify it. As your score is below those levels, it’s advisable to steer clear of the big banks and the retail lenders. Stick with the options listed below.
- Veterans United: known for manual underwriting for scores in the 500s
- Navy Federal (if eligible): their own portfolio VA loans are more flexible
- PenFed, USAA, Freedom Mortgage, and Carrington: all offer programs for lower credit scores
- Find a broker who works with several wholesale lenders. You want someone who will go out and look for a lender who will approve you, not just someone who sticks to the 620 rule.
Just had a lender approve a loan for an Army veteran with a 583 using manual underwriting (no down payment, good rate). With your strengths a 566 is absolutely achievable.
2. What Actually Gets You Approved at 566
Automated underwriting looks at more than just late payments. It looks at how frequently you’ve been late, how severe the late payments were, and how recent they are. For the next 30 days, concentrate on the rest of your application.
- Residual income is your main advantage. VA guidelines will allow a DTI above 41% if your residual income is strong.^1^ You need to know your actual residual income, as this will help to offset a low score. If your late payments were the result of hardship or a military assignment, then you’ll need to have your orders, your deployment paperwork, and any hardship documentation to hand. Manual underwriters will appreciate a clear explanation.
- Having no late rent payments is a major plus. Lenders look at your housing payment history more than your late credit card payments. Your housing history is spotless, so make sure you point that out. Ask your landlord for a letter confirming 12 months of rent paid on time.
- Late card payments are far less damaging to your score than late mortgage payments. If your only late payments are on your credit cards and consumer debt, you’re in a far better position than I3. Rapid Credit Repair (Next 14 Days: What’s Possible) 14 Days — Realistic Gains)
You can’t fix a year’s worth of credit history in 30 days, but you can still raise your score:
- Get all three of your credit reports from AnnualCreditReport.com today. Disputing the errors can result in a score increase in 30 to 45 days which is well within your timeframe. Look out for duplicate late payments, wrong balances and collections that aren’t actually yours.
- Bring your pay down on each credit card to below 30% of the limit (below 10% is even better). That’s a huge factor in your FICO score and can often see your score go up in one or two reporting cycles. ^1^ ^7^ Switch on autopay on all your bills straight away. Another 30-day late payment and your score could drop by 60 to 100 points. Just don’t hand the underwriter any more late payments.
- Ask your loan officer about a ‘rapid rescore’. That can quickly update your credit report following a balance paydown, and new scores can appear in days rather than weeks. Don’t forget to ask for it.
4. The 30-Day Timing Problem: Take Action Now. Most VA loans take about 30 days from application to closing so you’ve got just enough time. You could ask your landlord for a short extension or to go month to month. Let them know you’re in the middle of a custody battle, and you’re working through the loan approval. They’re more likely to oblige if they understand the circumstances.
- Get pre-approved before the 30 days expire. That way you can demonstrate to the seller or landlord that your financing is all sorted.
- If closing is going to take longer, consider a rent-to-own or lease as a temporary solution. That keeps you in the house and maintains the stability for custody.
- Manual underwriting takes 35 days (as per the 583 score example above^4^) so you’d be best to submit your application this week rather than wait.
5. Documents to Gather Today
- Last 2 years W-2s / tax returns, last 30 days pay stubs
- Last 2 months’ bank statements
- COE (Certificate of Eligibility): get it from va.gov or ask your lender to pull it
- Military orders showing the assignment away.
- Hardship documentation
- Landlord rent verification letter (showing 12 months with no late payments)
- Write any letters explaining late payments yourself. Keep them factual and brief. Two Things to Avoid
- Don’t have multiple lenders checking your credit in a rush. VA mortgage inquiries within a 14-45 day period are all counted as one inquiry so you should shop around fairly quickly but don’t rush the process.
- Don’t open any new credit accounts at this point. The key point is that a 566 will work for a VA loan if you can find the right lender and a manual underwriter. Your strengths (perfect rent history, military hardship, good residual income) are precisely the things that underwriters are looking for to approve a lower score. This week, find a broker who works with the sub-580 lenders, dispute any errors you can, get your credit card balances down, and if necessary, ask your landlord for a bit more time. Give yourself some breathing room.
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