Mortgage Commitment Letter
If the buyer is obtaining a mortgage, he or she will work on obtaining a Mortgage Commitment Letter from the bank for the mortgage. The Mortgage Commitment Letter is issued once the buyer has secured the loan. This letter is a requirement of the Board Package.
Securing the Loan
- Applying for a mortgage can begin before you find a home or after you have submitted an offer, however, it is best to do this as early in the process as possible so as to eliminate any surprises.
- The buyer will have to fill out an application that involves a lot of paperwork.
- The lender will take a detailed look at the buyer’s credit history, employment record and financial assets and liabilities.
Issuance of the Mortgage Commitment Letter
A Mortgage Commitment Letter is the document an underwriter sends to the loan officer once a loan is approved. This is the real thing! The Mortgage Commitment Letter will detail every aspect of the mortgage. It will include the terms and interest rate. It will itemize the “Conditions” (the items that must be provided or explained for final approval). The Mortgage Commitment Letter will be dated and it will have an expiration date. It may be signed by the underwriter.
While the pre-approval letter is a great thing to have when beginning your search, the buyer is not really approved until the Mortgage Commitment Letter is issued, as the Mortgage Commitment Letter is a formal, legally-binding document.
THE NEXT STEP IS BOARD APPROVAL.