What is a mortgage commitment letter?

What you'll learn

— What a mortgage commitment letter is and why it matters
— The difference between conditional and final commitment letters
— When you'll receive your commitment letter during the home buying process
— What happens after getting your mortgage commitment

A mortgage commitment letter marks a major milestone in buying your home. This document confirms that a lender has approved your loan application and agrees to fund your mortgage, though you may still need to meet certain conditions.

Understanding the difference between pre-approval and a mortgage loan commitment can save you stress and uncertainty during your home purchase. While many buyers focus on getting pre-approved, the commitment letter offers much stronger assurance that your financing will actually close. The underwriting process involves lenders reviewing your credit history, income, assets, and the property appraisal before issuing this crucial document.

This guide walks you through everything about mortgage commitment letters—what they contain, the different types, timing, and next steps. Whether you're buying your first home or you're an experienced property investor, knowing how this document works helps you move through your purchase with confidence.

With Better, you can get a mortgage commitment letter in 24 hours with One Day Mortgage. This lets you go from application to full mortgage Commitment Letter within 24 hours vs. typical industry process of 30+ days. 

...in as little as 3 minutes – no credit impact

What is a mortgage commitment letter?

A mortgage commitment letter is an official document from a lender confirming they've approved your loan application and will provide financing for your home purchase. This letter represents a formal pledge to lend you money, provided you meet certain conditions.

The commitment letter arrives after your application completes the underwriting process. Your lender has reviewed your financial situation—credit history, income verification, debt-to-income ratio, and employment status. They've also evaluated the property through an appraisal.

This document carries more weight than pre-approval because of its binding nature. Pre-approval suggests you likely qualify for a loan, but a commitment letter confirms the lender will fund your mortgage. Most real estate transactions require this document before closing.

What is included in a mortgage commitment letter?

Every mortgage commitment letter contains essential details about your approved loan:

— Loan amount approved by the lender
— Interest rate and whether it's fixed or adjustable
— Loan term (typically 15, 20, or 30 years)
— Type of mortgage (conventional, FHA, VA, etc.)
— Closing costs and other fees
— Conditions that must be met before final approval
— Expiration date of the commitment

The conditions might require additional documentation, maintaining your credit score, or completing property repairs found during inspection. Some loan commitments also include rate lock details.

The letter outlines remaining steps to move from commitment to closing. Once you receive this document, you're much closer to finalizing your mortgage and completing your purchase. 

Types of mortgage commitment letters

Mortgage commitment letters come in two distinct forms, each marking a different stage in your approval process. Knowing the difference between conditional and final commitments helps you set realistic expectations as you move toward closing.

Conditional commitment

A conditional commitment letter means your lender is ready to fund your mortgage—but only after you meet specific requirements. This document shows your loan application has successfully passed the initial underwriting process, though additional conditions need completion.

Common conditions include:

— Submitting additional financial documentation
— Maintaining your current employment status
— Ensuring the property meets appraisal requirements
— Resolving title issues or liens

The conditional commitment follows your pre-approval and signals major progress toward securing financing. Most lenders issue this commitment after reviewing your financial qualifications but before completing all verification steps.

Final commitment

A final commitment letter represents your lender's unconditional promise to fund your mortgage. All requirements from the conditional phase have been satisfied, and your loan commitment is now guaranteed.

Key details in a final commitment:

— Loan amount: The exact dollar amount approved
— Interest rate: Your locked rate and loan type
—Loan term: Length of your mortgage (15, 20, or 30 years)
— Closing costs: Final fees and expenses

The final commitment typically arrives shortly before closing, giving you and the seller confidence that financing is secure. You can move forward knowing your mortgage will close as planned.

Understanding what happens after getting pre-approved also helps you anticipate the steps leading to these commitments and ultimately to homeownership.

When and how to get a mortgage commitment letter

Getting a mortgage commitment letter follows a specific sequence of steps, each bringing you closer to securing financing for your home purchase.

Prequalification

Your mortgage journey might start with prequalification, a preliminary step where lenders estimate how much you might borrow based on self-reported information. While helpful for setting a budget, prequalification doesn't guarantee loan approval. A Better option is to get an idea of your home buying budget using Better's Mortgage Calculator.

Pre approval

Pre-approval with most lenders requires more rigorous documentation. They could verify your income, assets, and run a credit check. This results in a pre-approval letter indicating how much you can likely borrow. Many sellers require this document before accepting offers, as it shows you're a serious buyer with financing capabilities. With Better, you can get pre-approved in as little as 3 minutes, with no impact to your credit score. 

Mortgage application

Once your offer gets accepted, you'll submit a formal mortgage application. Underwriters evaluate your financial situation and the property's appraisal thoroughly. If everything meets the lender's criteria, they'll issue a loan commitment. 

Timeframes vary between lenders, generally taking 30-45 days from application to commitment letter. Maintaining consistent employment and avoiding new debts during this period helps ensure a smooth approval process.

With Better Mortgage, the average purchase mortgage closing time is 12 days faster than industry average. 

What happens after getting a mortgage commitment letter?

Your mortgage commitment letter puts you in the final stretch of homebuying. Several important steps remain between this milestone and getting your keys.

You'll tackle any outstanding conditions listed in your commitment letter first. This might mean providing additional documentation or completing property repairs identified during inspection. Your lender schedules the closing date around this time, typically within 30-45 days.

Your lender conducts final verification checks as closing approaches through the underwriting process. They confirm your employment status hasn't changed and check that no new debts appear on your credit report. You'll receive a Closing Disclosure detailing final costs at least three business days before closing—review this carefully for any unexpected changes.

The final walkthrough happens next, letting you verify the property remains in the agreed-upon condition. Closing day involves signing numerous documents and providing certified funds for your down payment plus closing costs.

Your mortgage approval becomes an actual loan at this point. Funds transfer to the seller, and you receive the keys to your new home. 

Frequently asked questions

Homebuyers often have questions about mortgage commitment letters after learning the basics. Here are the most common concerns:

Does a mortgage commitment letter mean I am approved?

Yes, a mortgage commitment letter confirms your loan has been approved, but conditions may still need to be met. Think of it as approved with an asterisk—until you satisfy all requirements, final approval isn't completely guaranteed.

What happens if the rate lock or mortgage commitment expires?

You'll need to request an extension from your lender, which often involves fees or rate adjustments based on current market conditions. Watch these deadlines closely during the mortgage approval process to avoid unnecessary costs or complications.

Can you revoke a mortgage commitment letter?

Yes, lenders can pull back commitment letters if your situation changes significantly. Major shifts like job loss, credit score drops, or taking on new debt could prompt a reassessment of your pre-approval. Keep your financial situation stable once you receive your commitment.

How long does it take to receive a mortgage commitment letter?

Expect your commitment letter 2-3 weeks after submitting your application, once the underwriting process wraps up. Complex financial situations or unique property types may extend this timeline. With Better, you can get your commitment letter in 24 hours with One Day Mortgage. 

Does a mortgage commitment letter help win bidding wars?

Absolutely. Sellers gain confidence knowing your financing is nearly locked in, giving you an edge over buyers with only pre-approval letters. 

Take control of your mortgage commitment

The mortgage process involves several key documents, but a mortgage commitment letter stands as the most significant milestone before closing on your home. While getting pre-approved is an important first step, securing a loan commitment provides much stronger assurance that your financing will actually close.

Conditional and final commitment letters serve different purposes in your home purchase. Conditional commitments show substantial progress but require meeting specific conditions, while final commitments represent the lender's unconditional promise to fund your mortgage. Address any conditions promptly to keep your purchase on track.

Your path from prequalification to closing follows a predictable sequence, with the underwriting process serving as the rigorous evaluation that leads to your commitment letter. This document significantly strengthens your position as a buyer, potentially giving you an edge in competitive markets.

Even after receiving your commitment letter, several critical steps remain before you get your keys. Satisfy remaining conditions, maintain your financial stability, and prepare for closing day—all require attention to detail.

Treat your commitment letter as both an achievement and a reminder that homeownership is within reach—just a few final steps away.

Ready to start your home buying journey? Get pre-approved today and take the first step toward your mortgage commitment letter. Remember, with Better, you can get a mortgage commitment letter in 24 hours with One Day Mortgage.

...in as little as 3 minutes – no credit impact