Mortgage Commitment Letter Sample

By | January 6, 2015

As a final step in the mortgage application process, a mortgage commitment letter is issued by the lender to put a final seal of approval on the mortgage modalities decided between the lender and the borrower. While there is no standardized format on which a mortgage commitment letter is written, there are some rules that are good to follow if you are writing a letter of this type.

A mortgage commitment letter needs to address all the liabilities that are associated with a mortgage loan. It usually starts off by the lender congratulating the borrower about his mortgage loan being approved (the niceties need to be handled first) and then goes on to provide information about the loan amount, payback time period and interest rate. It will also detail the monthly payments that have been agreed by both parties and any taxes or applicable fees that will transpire during the mortgage period.

Here is an example that you can refer to before you begin writing your own mortgage commitment letter:

Mortgage Commitment Letter Sample

January 6, 2015

Mr. Timothy Abel
1927 Lucky Road
Georgetown, KY 01245


Dear Mr. Abel:

Subject: Mortgage Approval

Congratulations on the approval of your mortgage loan application! A list of documents needed to complete the approval is enclosed herewith. Please note that any documentation that does not satisfy the terms and conditions, will render the approval unguaranteed. If there is any material change in your financial situation, this commitment is subject to change at the will of the Lender. Please refer below for details:

Loan Type: Mortgage
Loan Amount: $17,000
Loan Term: 36 months
Simple Interest Rate: 28%

Please refer to the terms and conditions laid out in this mortgage commitment letter to ensure a smooth process.

Interest Rate Adjustment
Interest rate will be adjusted every 12 months based on an index plus margin. You will be duly notified of this change as and when it occurs.

Lock In
You have an option of an interest rate lock-in and discount points for your mortgage application. If your loan is funded within the price protection period, the loan will be issued at the said interest rate and associated discount points will also be granted.

The monthly payments that you provide to us will include all tax, hazard insurance premium and mortgage insurance premiums amounts in addition to other amounts escrowed under the loan agreement.

New Construction
New construction can only commence once the house is completed prior to loan closing and in accordance to approved specifications and building plans.

Legal Compliance
The property must comply with applicable state building and zoning regulations

Modification and Addendum
We reserve the right to made amendments, add addendums or withdraw this approval if any material facts do not conform to what has been revealed to us by you prior to this agreement.



(Joe Tripiani)