A verification of mortgage (VoM) is a report that details your mortgage payment history over the past 12-24 months.
Whether you’re seeking to acquire a new property or are looking to remortgage one you already own, they can be essential for securing a loan.
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All of this might sound a little daunting. However, acquiring one is normally a straightforward process that most mortgage applicants will go through.
This guide will give you a clearer idea of what exactly a VoM is, why you need one, and what’s included.
VoM definition
Think of a VoM as a sort of reference from your previous lenders.
When applying for a mortgage, you’ll need it to show a new lender you’re a reliable borrower who can meet your repayments.
Late repayments on a mortgage within the past 12 months can severely impact your ability to obtain a mortgage in the future.
This may be a deal-breaker when it comes to a new mortgage application.
However, some lenders will still consider your application if you were no more than 30 days late with a repayment on just one occasion.
Why do I need a verification of mortgage?
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We’ve looked at what a VoM is, but is it really necessary to have one?
After all, lenders will already have access to your credit report and details of your income.
Though this is true, a mortgage verification form is a document specifically detailing your mortgage history.
Therefore, it proves your reliability when it comes to repaying this one type of loan in particular, which is often what lenders want to see.
Repaying your mortgage on time each month shows lenders not only that you can afford your repayments but that you have the right attitude to paying off your outstanding loans.
Understandably, mortgage lenders want to make reliable investments.
Without details of your mortgage history, they may not feel they have sufficient information to make an informed decision.
Therefore, a VoM, along with other documentation such as a credit report, is often necessary for obtaining a mortgage.
You can request a verification of mortgage from your previous lender.
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Depending on their policies and processes, they may direct you to an online form that allows you to formally request your VoM.
What is included within a verification of mortgage form?
A verification of mortgage is a factual document.
It doesn’t get into the nitty-gritty of why you were late with repayments or any mistakes you might have made during the application process. It simply states the following:
- Your payment history. How many payments you’ve made toward your mortgage, and how many have been late.
- Unpaid principal balance. How much money you still owe for your mortgage.
- Payment within escrow. This refers to the amount of money you have in (or are still paying into) escrow. For example, property taxes and insurance.
- Mortgage status. Whether your mortgage is ongoing.
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A VoM is important for showing a new mortgage lender that you’re capable of repaying your loan.
If you’ve made your repayments on time each month, there’s nothing to fear from obtaining one and sharing it with the lender. It simply proves you’re a reliable investment.
Of course, documents can quickly pile up when it comes to mortgages.
You’ll likely have documentation from your previous mortgages, proof of your income, and mortgage statements.
With PandaDoc’s document management system, you can keep (and manage) all the important stuff in one place.
Use PandaDoc to ensure you have everything to hand as and when you need it.
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Disclaimer
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