Real Estate Term of the Day: Loan Commitment

Real Estate Term of the Day: Loan Commitment

LOAN COMMITMENT – an agreement to lend money, generally of a specified amount, at specified terms at some point in the near future (Barron’s Dictionary of Real Estate Terms) 

Below is a brief guideline of the loan process:

  1. You submit the completed loan application and any required supporting documentation to the lender
  2. The lender provides a good faith estimate of closing and related costs, plus initial Truth-in-Lending disclosure
  3. The lender orders an appraisal of the property, a credit report and begins verifying your employment and assets
  4. The lender evaluates the loan application and your supporting documents, approves the loan and issues a letter of commitment
  5. You sign the closing loan documents and the loan is funded
  6. The lender sends the funds to escrow