Ah, the dreaded income verification. You’ve got to gather the paperwork, make a few phone calls, and get all your ducks in a row. Depending on what documents you need and the parties involved, the process can drag itself out. When that happens, it’s not a fun experience for either side.
The party verifying everything sits on a file they’d rather close, and the person hoping to hear the words “you’re approved” is left hanging. Yes, income verification is necessary for a new loan or rental home, but technology can make the procedure less of a headache. Below are four benefits of using tech in the verification process.
1. Efficiency
Not everyone works a single nine-to-five job. Tax time and verification of income can be easy for folks who do. But not so much for people who freelance and work several jobs. If you recently switched companies or have multiple income streams, proving your earnings gets messy. You have to get documents from several sources, including former employers.
Those documents might be a mix of bank statements, W-2s, 1099s, and digital wallet account statements. As if the gathering process wasn’t stressful enough, the company asking for proof of income has to sort through everything. Someone in underwriting has to match up what you say you earn with each documented source. And when something is missing, or the math doesn’t add up, there’s a round of frustrating phone calls in your future.
With online verification platforms, most of these tedious steps go away. Most software allows applicants to scan and upload required documents quickly. You know exactly what the other party needs to approve your application. Some platforms are even more efficient, letting you bypass the paperwork altogether. The software can connect to major payroll providers and banks, verifying your income in seconds instead of weeks.
2. Security
Technology may not be perfect when it comes to data security. News stories about major data breaches and ransomware attacks prove this point. But you can bet that tech can verify identities and keep private information under wraps more securely than manual processes.
Who knows where it goes when you hand over papers with your social security and bank account numbers? It could end up in a folder sitting in a storage box for decades. Anyone with access and prying eyes can get your information. Plus, if your documents get into the wrong hands, someone might submit them as their own. Identity theft happens under the radar, with no notification about compromised details.
It’s a timing problem, with a 584% surge in ID theft cases in the past 20 years. Unlike manual verification processes, software can ensure the person submitting documents is legit. Matching facial recognition scans with photos of government-issued IDs is one way. Fingerprint and two-factor authentication sign-in methods are others. And with many automated platforms, income verification happens without a person looking at someone else’s sensitive info.
3. Streamlining
There are times when someone won’t win the approval threshold. They can either wait for a salary increase or get a cosigner. While a cosigner can save the day, it complicates the verification process. Now, two people need to submit their documents.
Manual income verification gets tricky. A person has to sift through multiple piles of paperwork, keep each application straight, and potentially reach out to more employers. The possibility of delays and mistakes increases, which means more frustration for the applicant.
It’s the experience a lender wants to deliver, yet it’s so common with home loans. Mortgage applications often involve more than one borrower, and 89% of participants in a recent survey said applying for a loan was more stressful than buying a house. Digital processes can make it easier for multiple borrowers to get the green light.
Each person submits their details for income verification into an online platform. There aren’t enough piles of paperwork for underwriters to sort through, and there are fewer opportunities for mistakes. When platforms automatically connect to payroll software, the IRS, and banks, verifying more than one borrower becomes seamless. With fewer complications and delays involved, lenders can make applicants’ experiences less challenging.
4. Quicker Access to Funds
Technology does more than speed up the paperwork. It can also deliver the funds you’re relying on faster. With a stamp of approval, your closing date on your dream home can happen as scheduled. Or, the home equity money you need to start the bathroom remodels instantly connects to your bank account. You don’t have to push out your plans or get yourself in a pickle.
Besides lacking minimum income requirements, challenges like missing documents and recent job changes can delay funds. Take a career switch as an example. Your lender may want proof of income for the past two years. But you won’t win two years of W-2s from the same organization. More than likely, your salary also changed.
It could be higher, lower, or around the same. Yet, in a lenderlender’s income stability matters. It’s postseason, and self-employed applicants experience more difficulties with loan approvals. The good news is income verification technology can get around life’s life’s life’s life’s life’s life’slife’stableness. It verifies earnings from recent job changes, multiple employers, passive investments, and self-employment without lengthy explanations.
The Advantages of Income Verification Technology
Tech is supposed to simplify life’s necessities. Verifying your income for a loan is one of those. With online verification solutions, lenders deliver more satisfying experiences, and applicants get approved faster. There’s a hassleyone involved, making tech and income verification an ideal match.
