commitment letter-is it safe? (loan, pre-approval, rate, loan)

[weartoomanyhats]

Our lender said we're about to get a commitment letter once she gets a couple more signed documents. The documents we're to sign seem to be normal. At this point in this exhausting process, I'm stunned.

Isn't a commitment letter the real deal? Once you get a commitment letter, doesn't that mean the lender can't back out of the deal (provided there's no fine print in the commitment letter)? Do "fake" commitment letters ever have fine print? Should I be happy or be wary?

Still in shock!

[renriq02]

it's not over until you get the keys to your new home.

lenders are still going out of business, and still try to woo ppl to go with them

Originally Posted by weartoomanyhats

Our lender said we're about to get a commitment letter once she gets a couple more signed documents. The documents we're to sign seem to be normal. At this point in this exhausting process, I'm stunned.

Isn't a commitment letter the real deal? Once you get a commitment letter, doesn't that mean the lender can't back out of the deal (provided there's no fine print in the commitment letter)? Do "fake" commitment letters ever have fine print? Should I be happy or be wary?

Still in shock!

[weartoomanyhats]

But, assuming they stay in business, can they offer commitment letters that aren't binding on their part, provided all the info they received from the borrower was correct?

[renriq02]

i have lenders offer a loan commitment then still deny the loan because something was wrong with the property.

When you get your keys to the house then you know everything is well.
If the lender wanted to, they can deny your loan for any reason.

I have a couple loans denied due to the flooding up north.
Loans were given a 'clear to close'.

Originally Posted by weartoomanyhats

But, assuming they stay in business, can they offer commitment letters that aren't binding on their part, provided all the info they received from the borrower was correct?

[NJ987654]

A committment is better than a preapproval (it means that the conditions have been cleared by an underwriter). however, some "comittments" still have outstanding conditions. As said in a previous post, nothing is guarenteed until you have the keys

[weartoomanyhats]

WE have the letter, and there are no conditions from our end that haven't already been fixed. It is labeled "clear to close." In addition, I've read the fine print and there are not surprises included with regards to terms or contract details. I know it's not the flimsy thing a pre-approval is, but I wanted to know that it was in someway a binding commitment on their part, if I do my part.

Right now, I'm going to be optimistic. If they say I'm worthy, then I'm going to assume things will happen. Maybe I'll actually sleep between now and Thursday!

[chet everett]

The simplest way to answer might be ask what sort of "consideration" have you and the lender exchanged? Not a whole lot, some signatures & time.

So if the stock market explodes or a damn burst upstream of your house or your seller is caught selling crack out of the old house odds are the lender is not going to living up to their end of the deal and would not expect you to do anything should some horrible fate befall you...

[weartoomanyhats]

I know the stock market affects rates. Have you seen incidents where the locked rate is so low the lender denies the loan? Or are you talking about a 1929-ish stock market dilemma.

Just when I was starting to make myself feel better...