What If I Cannot Prove My Rental History on a Home Loan?

While you may think you're at an impasse with the mortgage approval process because your landlord refuses to verify rental history, the reality is that verification of rental history for mortgages isn't actually a requirement. Many people wrongly believe that verification of rent is required in order for banks and lenders to approve loans. However, you don't necessarily need your landlord's compliance to be able to push forward with your application to the satisfaction of your lender.

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Yes, lenders typically use verification of rent to gauge the reliability of applicants. In most cases, your landlord or property manager will fill out a "verification of rent" form supplied by the mortgage company. A willing landlord or property manager will sign and return the form; however, you won't be penalized if they refuse. What's more, you don't need to be a current renter to be approved for a mortgage.

Do you need rental history to buy a house? No, it's not a requirement. Plenty of people live with family to save up good down payments before jumping to homes of their own.

If you do want to use your rental history to qualify for a home loan even though your landlord refuses to verify rental history, you still have a way to do it. You can supply your mortgage company with canceled rent checks. While this probably won't be required if you rent from a larger property company, some lenders will specifically ask to see canceled checks if you rent from a landlord.

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The reason why some lenders ask for verification of rental history for mortgages is because landlords don't actually report payment history to the credit bureaus. That means you don't get any "positive" points for consistently paying rent on time for years. The fact that your rental activity never shows up on your credit history also means that mortgage companies don't have a way to confirm the length of your lease, your monthly payments and how consistent you've been with payment just by pulling up your credit score. However, failing to pay your rent on time could harm your credit score.

While landlords almost universally don't report rent payments to the credit bureaus if you're consistent, they will report you if you are paying rent late, owe rental payments or have defaulted on your lease agreement. This can create big problems if you're trying to qualify for a mortgage. Your credit report is one of the biggest factors used by mortgage lenders when determining whether or not to approve you for a mortgage.

If you're avoiding verification of rent because you think it will keep the fact that you haven't paid your rent a secret from lenders, this strategy won't work. Once your landlord reports your outstanding or late payments to the credit bureaus, that information will stay on your credit report for approximately seven years. Late or unpaid mortgage payments are red flags to lenders. This can even be enough to get your mortgage application denied even if you meet the criteria for income.

The bottom line is that you can use canceled checks if your landlord refuses to verify rental history. However, most landlords will provide information to mortgage companies when contacted. While consistent rent payments can help you to qualify for a mortgage, not renting won't disqualify you for a mortgage. The only thing that can hurt you is being a renter with missing rent payments.