What is a mortgage commitment?

A mortgage commitment is indeed a lender's formal offer to provide funding for a specified loan under agreed terms. This document is essential in the mortgage process, as it signifies that the lender has evaluated the borrower's financial situation, property appraisal, and creditworthiness, and has decided to proceed with the loan under specific conditions.

The mortgage commitment details the amount of money the lender is willing to lend, the interest rate, the loan duration, and any conditions that must be met before the loan can be finalized, such as the approval of a property inspection or submission of additional documentation. It serves as a guarantee to the borrower that the lender will provide the funds needed to purchase the property once all conditions are satisfied.

In other scenarios, terms such as a conditional loan agreement might suggest that certain additional criteria need to be met, but a mortgage commitment carries more weight, confirming the lender's intent to lend and outlining the terms under which they would do so. Informal promises and documents outlining repayment history are not accurate representations of a mortgage commitment and do not convey the same level of formality or assurance.