What documentation is essential for lenders to determine a borrower's eligibility?

A letter of employment is crucial for lenders to assess a borrower's eligibility because it provides essential information about the borrower's current job status, income level, and employment stability. Lenders want to ensure that the borrower has a reliable source of income to cover mortgage payments. This documentation typically includes details such as the nature of the employment, length of time at the job, and the borrower's salary or hourly wage.

By verifying employment, lenders gain confidence in the borrower's ability to manage their loan obligations. While other documents, such as proof of social security number, evidence of past loans, or a list of personal assets, may provide supplementary information about the borrower’s financial picture, the letter of employment directly substantiates the borrower's ongoing income, which is a primary factor in mortgage eligibility assessments.