- A formal document supplied by a lender to a home buyer that details the terms under which the lender will lend money to the home buyer. Also known as a "loan commitment." This letter indicates the contingencies that must be cleared prior to funding the loan.
pledge, assurance note, vow, promise
Related Terms and Acronyms
- Commitment — Definition,
- A written agreement from a lender promising to lend money on certain terms for a specified time period.
- Conditional Commitment — Definition,
- A promise by a lender to make a loan if the borrower meets certain requirements.
- Firm Commitment — Definition,
- A lender's promise to lend money to a specific borrower on specified terms at a certain time.
- Loan Commitment — Definition,
- A lender's promise to advance a specific sum on specific terms.
- Pre-approval Letter — Definition,
- A document from a lender or broker, estimating how much a potential home-buyer could borrow, based on current interest rates and a preliminary look at credit history.
- Standby Commitment — Definition,
- A commitment from a lender to make a loan in a specified period of time on specified terms with the understanding that the borrower will not likely draw down the funds.