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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Firm Commitment


Synonyms:firm agreement, lender commitment, loan agreement, loan commitment
Filed Under: financial-banking, mortgages
Tags: banking, mortgage
 

Definition of firm commitment

firm commitment
1. A promise made by a lender to give a borrower a loan based on certain terms and conditions at a specific time.

Related Terms and Acronyms:

  • commitment   A written agreement from a lender promising to lend money on certain terms for a specified time period.
  • conditional commitment   A promise by a lender to make a loan if the borrower meets certain requirements.
  • loan   Letting another party use something of value temporarily.
  • loan commitment   A lender's promise to advance a specific sum on specific terms.
  • mortgage (mtg)   A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • pre-approval   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   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   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.
  • rate hold   The length of time, typically between 60 and 120 days, that a lender will guarantee a loan's interest rate once you are locked in.
  • standby commitment   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.

More Related Terms and Acronyms

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