A commitment fee is a charge required by a lender to lock in specific terms on a loan at the time of application, ensuring that the terms agreed upon will be honored and the funds will be available when needed.
A commitment letter is an official notification from a lender to a borrower indicating that the borrower’s loan application has been approved, detailing the terms of the prospective loan.
A loan application is a necessary document required by a lender before issuing a loan commitment. It includes key details such as the borrower's personal information, loan amount and terms, property description, and financial and employment data.
Loan fraud involves intentionally providing false information on a loan application to qualify for a loan or secure better terms. This illegal act can lead to civil liability and criminal penalties.
A loan officer assists borrowers throughout the loan application process, coordinating between the borrower and financial institutions to ensure the information provided supports the approval of the loan application.
A loan origination fee is a service charge collected by lenders for processing new loan applications. This fee can cover various administration tasks such as application processing, underwriting, and funding the loan.
The locked-in interest rate is a promise from the lender to provide a specific interest rate for a mortgage or loan, valid for a predefined period, regardless of market rate fluctuations during that period.
The initial stage in which a lender evaluates a borrower's financial capability to approve a specific loan amount, providing prospective homebuyers confidence and an advantage during the home buying process.
