For self-employed members, what must be documented as part of the income verification process?

The income verification process for self-employed individuals requires thorough documentation, and a key aspect of this is obtaining a reliable source of verification about the business's operational status and income. The equivalent of verbal verification of employment is necessary because it aims to establish the credibility of the self-employment income claimed by the individual. This process typically entails having a lender or financial institution reach out to credible parties who can confirm the income and operational details of the self-employed member’s business. This form of verification provides a level of assurance regarding the individual’s financial stability and ongoing business operations, which is crucial for assessing loan applications.

The other options do not align as directly with standardized income verification requirements. For example, while written contract agreements with clients can provide insight into expected income, they do not verify the income actually received. Financial statements from previous years can provide additional context about historical earnings but may not reflect current income levels accurately. Verbal confirmation of business operations lacks the reliability and formal structure typically expected in income verification processes. Therefore, the method that reflects more stringent verification protocols is sought, which supports the selection of the equivalent of verbal verification of employment as a critical component.