Casa Academy

Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.

Loan Commitment

A loan commitment is a lender's written agreement to provide mortgage financing on specified terms if the borrower and property satisfy stated conditions before an expiration date, giving buyers confidence to proceed toward closing while remaining subject to final underwriting clearance.

Exam context

Match loan commitment to lender's conditional promise to lend. Pre-qualification is informal; pre-approval is stronger but still not final funding. Clear to close means conditions satisfied.

Contents and conditions

Commitments list loan amount, interest rate or rate lock terms, product type, and closing cost estimates. Conditions may require satisfactory appraisal at or above purchase price, clear title, hazard insurance, and verification of employment close to closing. Rate locks protect against market movement for a fee during processing. Expiration dates force extension or re-lock if closing delays.

Contract contingencies

Purchase contracts often make the deal contingent on buyer obtaining commitment within a deadline. Failure to secure financing may allow earnest money return if properly noticed. Agents track milestone dates and communicate when buyers must remove contingencies to avoid default after commitment is issued.

Examples

  • Appraisal condition

    A commitment approves $400,000 at 6.25% subject to appraisal supporting value. If the appraiser reports $385,000, the lender may reduce the loan amount unless the buyer increases down payment.

  • Contingency removal

    A buyer receives commitment on day 18 of a 21-day financing contingency and sends removal notice, making the contract binding even if the lender still clears final underwriting items before funding.

Keep studying

Practice loan commitment questionsEnroll in pre-licensing

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