To prepare salary verification for a home purchase, gather official documents such as recent pay stubs (typically covering the last 30 days), federal tax returns for the past two years, W-2 forms, and a letter from your employer confirming income, job title, and employment duration. Bank statements for the past three months may also be required to demonstrate consistent cash flow. Lenders often request additional proof for self-employed individuals, including business tax returns or profit-and-loss statements. Ensure all documents are recent, accurate, and signed by a supervisor or HR representative.

This process is critical because mortgage lenders use salary verification to assess a borrower’s ability to repay the loan, which directly impacts approval chances. According to the Consumer Financial Protection Bureau (CFPB), 18% of mortgage denials in 2022 were due to insufficient income documentation. Proper verification establishes credibility, reduces lender risk, and aligns with guidelines from entities like Fannie Mae, which mandates a minimum of 24 months of steady income history. Data from the National Association of Realtors (NAR) shows that buyers with complete salary verification close loans 65% faster than those without, underscoring its role in streamlining the home-purchase process. Additionally, a 2023 study by CoreLogic found that 45% of applicants with gaps in employment or inconsistent income faced delays or higher interest rates, highlighting the necessity of transparent documentation.