What is a loan commitment and how to obtain one: Generally, all loan commitments are what are called conditional loan commitments. This means that the loan is approved based on the borrower providing certain loan conditions. A loan to commitment letter is a letter given or provided by the mortgage lender that indicates that a borrower has passed their underwriting guidelines and that the lender is willing to offer the borrower a home loan. The letter of a loan to commitment is just an indication that the buyer’s home loan has been approved.
The time it would take to get a commitment letter would differ depending on how quickly you give your loan officer the documentation to submit. Generally, once the loan is submitted it would take around 3 to 5 days to process, fully documented loan commitments can be ready with some lenders in less time but factor in a week to be safe.
First, the applicant receives a prequalification letter that confirms he meets all the qualifications needed to get a loan to commitment. Then the lender receives all the documentation and reviews it to decide whether the applicant can get the loan to commitment. The letter of the loan to commitment is supposed to signify that the applicant has met all qualifications to receive a loan guaranteed. After you have received the loan commitment your loan officer will discuss the conditions with you to get your file cleared for closing.
Typically loan conditions will be items like the appraisal of the property, title search and homeowners insurance. There also can be other items added to the list depending on your situation.