Firm Commitment
Definition
- A promise made by a lender to give a borrower a loan based on certain terms and conditions at a specific time.
Synonyms
firm agreement, lender commitment, loan agreement, loan commitment
Related Terms and Acronyms
- 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 Commitment — Definition,
- A promise by a lender to make a loan if the borrower meets certain requirements.
- Loan — Definition,
- Letting another party use something of value temporarily.
- Loan Commitment — Definition,
- A lender's promise to advance a specific sum on specific terms.
- Mortgage (mtg) — Abbreviation, Important,
- 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 — 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.
- Rate Hold — Definition,
- 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 — 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.
