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Pay stubs aren’t as good as LOEs for many large purchases in Canada. If you’re looking to purchase a home, a vehicle, or anything else worth a large sum, letters of employment are often required, along with bank statements and pay stubs.
LOE’s For Mortgages
If you’re looking to get a mortgage, it’s common for the lender to ask for a letter of employment. That said, a letter of employment may also be referred to as a job letter or even an income verification letter. For it to be considered for a mortgage, though, it has to be done on company letterhead and include a way for the same company to be contacted. It should also be signed by the individual who wrote the letter.
The reason that most mortgage lenders require a letter of employment when considering you for a mortgage is to verify that you have a reliable, stable income that will be able to cover your payments. These letters indicate to the lender exactly what your monthly and annual income is, as well as your job title, length of employment and a brief description of your job duties, which will prove your job status and job stability.
Where to Get A Letter of Employment
In order to get a letter of employment, you will have to speak to your employer. Who you speak to at your place of employment, though, depends on how your organization is set up. If you have a human resources department, then that’s the best place to start.
If there is no human resources department, then a senior manager should be able to write you a letter. However, it’s important to keep in mind that if you don’t have full-time employment and are considered a contract employee, your end date will be included in the letter as well.
What an Employment Letter Should Include
While we have gone over the basics of what should be included in a letter of employment to prove your employment status, it should actually be very detailed. Here’s a detailed list of what should be included.
- Company Letterhead
- Employers Address
- Date of the letter
- Annual salary information
- Job title
- Hire date
- Date employment ends (if scheduled end date)
- Employer signature
- Employers contact information
As long as your letter includes all of this, it will be treated as a letter of employment. However, you want to be sure that it’s up to date when using one. Even if it’s only a few months old, you should get an updated version.
Types of Letters of Employment
When it comes to letters of employment, there is actually a broad scope of different types. The most common type of LOE is used for large purchases. However, there are other types of letters of employment out there.
Letter of Recommendation
You’d request this type of letter from your employer if you’re applying to a specific academic program, a new job position or a new job. In this type of letter, your employer can verify your qualifications and speak to you about your character. They can also identify how your work ethic and traits will be beneficial to what you’re looking for. Keep in mind that you do have to request these types of letters.
Recommendation Request Letter
This type of letter requests a recommendation. You’d normally write it to a potential reference, who can be a former employer or teacher. You may even send this letter to someone that you used to work with.
The purpose of this letter is to gain recommendations for a position you’re applying for and a program you’re looking for admission to. When you draft this letter, you want to include what you’re looking to apply for as well as what your qualifications are so the person writing the recommendation letter has some context to include. You’ll also want to write individual letters to each recipient.
Letter of Interest
This type of letter is similar to a cover letter; however, the difference is that you only write this letter when there isn’t a position or posting available. Essentially, in this type of letter, you’ll introduce yourself describe your qualifications and the types of position you’re looking for. You want to make yourself seen as an asset should a job opportunity become available.
Cover Letter
A cover letter is a letter that you submit with your resume when you’re applying for a job. These letters are usually short one-page letters that show your interest in a position. You also go into detail regarding your qualifications and why you think you’re the best person for the position.
A good cover letter is only around 3 to 5 paragraphs long. It should have enough detail to be specific but only include mandatory information. It’s important to note that not all job opportunities require a cover letter, but it can put you a step ahead if you submit one anyway.
Follow Up Letter
While follow-up letters aren’t a requirement, they’re a good idea after you interview for a position that you’re very interested in. Typically, in a letter like this, you want to say thank you for the opportunity and offer up any information regarding your eligibility for the position that you haven’t mentioned before.
You’ll find that a follow-up letter is essentially a shorter version of a cover letter. Since not many applicants offer up a follow-up letter, it can set you apart from the other applicants and give you an edge.
Acceptance Letter
Depending on the type of position that you choose to accept, you may want to respond to the job offer with an official email of acceptance or an acceptance letter. In this type of letter, you want to say thank you for the offer and ask any questions you may have regarding the job opportunity.
Offer Letter
An offer letter is an official letter that an employer sends to you when they wish to offer you a position. In this letter, they will include the job title and employment type, salary, start date, and work hours, as well as ask for any required documents that weren’t already provided. Usually, these types of letters will also have a date on which they would like to have you accept or decline the offer.
Declination Letter
If you choose to decline a job offer that was extended to you, this is when you would draft up a declination letter. Due to the nature of this letter, you want it to be very brief. Generally, you would thank the employer for the offer and give a brief reason as to why you don’t want to accept the job.
Experience Letter
An experience letter is very similar to a recommendation letter. However, the main purpose of the letter is to show a potential employer your specific experience and how it relates to the new position.
The main points of a letter like this include your name, job title, your specific experience, and the name of your employer. It will be much more detailed in regards to your specific experience and will be directly related to a specific opportunity instead of being slightly vague, like a recommendation letter.
Resignation Letter
A resignation letter is something you would write up and give to your employer if you’re quitting your current job. This is also the type of letter that you would choose to keep brief and only write one to three paragraphs.
In this letter, you would indicate a brief reason for quitting your job and your last day of work. Once you’ve submitted your letter of resignation, you may receive a resignation acceptance letter, but your employer doesn’t need to send you one.
Template For A LOE
The setup for a standard letter of employment requested by your lender or bank is pretty simple. Each letter will include similar information and be tailored to your specific situation. Here is a template/example.
Final Thoughts
In Canada, it’s really common for a lender to request a letter of employment when you’re looking to make a large purchase. This type of letter verifies that you are employed and are able to make the payments on your purchase. In order to obtain this letter, you need to speak with a supervisor or HR, and they will be able to provide you with one.
An employment verification letter isn’t the only type of letter that you may receive from an employer, though. There’s an abundance of different types of letters that you can send or receive from your employer and some of these can also be used as employment verification letters. The most common is an offer letter. No matter which type of letter you get from an employer, though, it should be done on an official company letterhead.
