Legal Definitions - letter of commitment

A letter of commitment is a written document that outlines an offer made by a lender to grant a mortgage loan. It includes details such as the loan amount, interest rate, and other terms of the loan.

For example, if someone is looking to buy a house and needs a mortgage loan, they may receive a letter of commitment from a lender. The letter will state the amount of money the lender is willing to loan, the interest rate, and any other conditions that must be met.

This letter is important because it shows that the lender is committed to providing the loan and gives the borrower a clear understanding of the terms of the loan. It can also be used as proof of financing when making an offer on a house.