- A promise made by a lender to give a loan if the borrower meets the specified requirements.
with strings attached, subject to, promise, granted on certain terms, depending on
Related Terms and Acronyms
- Approval — Definition,
- An assessment made by a lender of a borrower's ability to pay for a home and a confirmation of the amount the borrower may obtain.
- Commitment — Definition,
- A written agreement from a lender promising to lend money on certain terms for a specified time period.
- Commitment Letter — Definition,
- A formal offer by a lender which states the terms under which it agrees to lend money to a home buyer. Also known as a "loan commitment." This letter will indicate the contingencies that must be cleared prior to funding the loan.
- Conditional Sale (C/S) — Acronym,
- An agreement between the buyer and seller in where certain conditions must be met before the property sale can be finalized.
- Firm Commitment — Definition,
- A lender's promise to lend money to a specific borrower on specified terms at a certain time.
- Kicker — Definition,
- Any benefit to a lender above ordinary fixed-interest payments such as an equity position in a property or a percentage participation in the income stream.
- Lender — Definition,
- The bank or mortgage company offering the loan.
- Loan Commitment — Definition,
- A lender's promise to advance a specific sum on specific terms.
- Mortgagee — Definition, Important,
- The lender in a mortgage transaction.
- Pre-approval — Definition,
- A process that mortgage lenders use to determine how much money they would lend you based on a thorough review of your financial situation. Lenders issue a pre-approval letter which strengthens your position when bidding on a home, as it shows sellers that you will be able to raise funds needed to purchase.
- 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.
- Pre-qualification — Definition,
- An informal process in which a lender will offer an opinion on how much money you may be able to borrow. This opinion is based entirely on the financial information you provide and is neither binding nor necessarily accurate because lenders have not yet verified your financial information.