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LSDefine
Simple English definitions for legal terms
commitment letter
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A quick definition of commitment letter:
A commitment letter is a written offer from a lender to give someone a loan to buy a house. The letter tells the person how much money they can borrow, what the interest rate will be, and other important details. It's like a promise from the lender to give the person the money they need to buy the house.
A more thorough explanation:
A commitment letter is a written offer from a lender to grant a mortgage loan. It outlines the loan amount, interest rate, and other terms of the loan. This letter is also known as a letter of commitment.
For example, if you apply for a mortgage loan, the lender may send you a commitment letter stating that they are willing to lend you a certain amount of money at a specific interest rate. This letter also includes any conditions that you must meet before the loan can be finalized.
Another example of a commitment letter is a letter of intent. This is a document that outlines the terms of a proposed agreement between two parties. It is not legally binding, but it shows that both parties are serious about moving forward with the agreement.
Overall, a commitment letter is an important document that outlines the terms of a loan or agreement. It helps both parties understand what is expected of them and ensures that everyone is on the same page.