How to Answer Probability of Continued Employment Question on Loan Applicatin

Employment verification forms contain several questions, many of which can leave you feeling as if you're making an educated guess as opposed to a definitive answer. A common question that crops up on these forms asks about the probability of the applicant's continued employment.

This question may feel impossible to answer without a crystal ball, but fortunately, there are steps you can take to ensure it's answered accurately. This will help your valuable employee get the loan or mortgage they want, and help you avoid making any mistakes that might prevent this from happening.

What is "probability of continued employment," and why does it matter?

The question of "probability of continued employment" likely sounds a little strange. It may even seem as if you're being asked to prematurely announce that the applicant is going to be laid off. But this question is actually concerned with the applicant's ability to pay a lender.

Mortgage companies and other financial institutions need to know whether an applicant can repay a loan or mortgage. The question of continued employment is getting to the heart of that matter. If there's a chance the applicant will be laid off in the coming weeks or months, their ability to repay a loan or mortgage will be hindered. Ultimately, the lender wants to ensure the applicant will have a stable income for the foreseeable future.

It's worth noting that not every employment verification form will ask, "What is the probability of continued employment?" Many forms phrase the question differently, such as the below example:

But how exactly do you answer this question?

How to answer the "probability of continued employment" question

When answering the question of continued employment, anything other than a solid, "yes," or "very likely," might alarm the applicant. Remember: The applicant's job performance isn't the focus of this question—the verifier is simply asking about whether the applicant will have a stable income months from now.

Because the question of continued employment is so important, it requires a thought-out, accurate response. Keep the following in mind to ensure you answer as accurately as possible:

• Loop in the employee's manager when necessary. The manager will have a better idea of the employee's performance and job stability.
• Be honest. Even if there's a chance the employee sees your answer, you need to answer honestly. The last thing you want is to lie and help the applicant get a loan that will bankrupt them down the road. When in doubt, contact the employee's immediate superior.
• In the event the employee may be let go in the near future, the question of continued employment becomes dicey at best. Consult with your company's legal adviser, if possible, before answering. This will reduce the likelihood you'll run into any legal trouble for stating the applicant may be unemployed shortly.
• Be prepared to lose the employee if you're answering negatively. If it gets back to the employee that you answered negatively, there's a chance they'll find another employer since they know their time is limited at your company.

So, when answering this question, reframe how you're approaching it. If the applicant is unlikely to be employed in the near future, you're helping them by answering honestly. Lying and saying the employee's job is secure could result in them getting a loan they can't repay.

Other common employment verification questions

Employment verification is typically straightforward, but there are occasionally questions that feel out of the blue. The following are some of the more common questions that you might not expect—but keep in mind that many states may have their own specific questions on employment verification forms.

• If overtime or a bonus is applicable, is its continuance likely? This question may not be a deal-breaker for a loan, as long as the bonuses or overtime aren't making up the majority of the employee's income. If you and the employee's manager can't confidently answer "yes," mark it "no."
• **Do you anticipate any changes in hours? ** If the employee is salaried and receives no overtime, this is an easy "no." Otherwise, consult with the department head or manager of the employee to come to an educated answer.
• Are there any anticipated changes in the applicant's pay in the coming months? This question likely requires input from the employee's manager, as they'll be able to advise you whether the employee is receiving a promotion anytime soon.

Much like the question around continued employment, check with the employee's supervisor or manager if you have any questions about the above items. Their manager will have a more intimate knowledge of the employee's performance, likelihood of receiving bonuses, upcoming promotions, and other changes.

Verifying with confidence

Employment verification is quick and easy when you make the right preparations. Understanding how to answer "probability of continued employment," and the other difficult questions outlined, puts you ahead of the curve and ensures verification will be far easier from here on out.

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Source: https://www.truework.com/verifications/knowledge/human-resources/howto-answer-probability-of-employment-other-verification-questions#:~:text=When%20answering%20the%20question%20of,stable%20income%20months%20from%20now.

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