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Finance: What is a Commitment Letter? 5 Views
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Description:
What is a Commitment Letter? A commitment letter is a document that is issued by a lender to a borrower pursuant to a full fledged loan agreement contract. The commitment letter is legally binding and spells out the amount of the loan and the terms under which the loan will be effectuated to the borrower.
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
- Terms and Concepts / Accounting
- Terms and Concepts / Banking
- Terms and Concepts / Bonds
- Terms and Concepts / Credit
- Terms and Concepts / Derivatives
- Terms and Concepts / Econ
- Terms and Concepts / Ethics/Morals
- Terms and Concepts / Financial Theory
- Terms and Concepts / Investing
- Terms and Concepts / Managed Funds
- Terms and Concepts / Metrics
- Terms and Concepts / Regulations
- Terms and Concepts / Stocks
- Terms and Concepts / Trading
- Terms and Concepts / Trusts and Estates
- Terms and Concepts / Wealth
Transcript
- 00:00
Finance a la shmoop what is a commitment letter? dear Rebecca it's been fun and
- 00:08
all but asking me to move in with you was a real turnoff so uh have a nice [Rebecca reading letter]
- 00:14
life yeah that would be a fear of commitment letter I know that one well
- 00:19
well so what's a commitment letter then all right well you need dough but you
- 00:23
don't need it today you need it in six months when construction is finished on
Full Transcript
- 00:27
your cabin by the lake at that point you'll convert your very expensive
- 00:31
building loan into a normal mortgage well you can go to the bank and for a [Man walks into bank]
- 00:36
small ish fee get a commitment letter from them which stipulates that assuming
- 00:42
nothing material changes between now and then you will in fact then get a loan
- 00:46
for one hundred fifty two thousand dollars at 5 percent fixed interest rate
- 00:49
for 30 years the bank is then committed to giving you that loan when you know [Contract stamped with committed]
- 00:54
eventually you need it that way you don't have to worry about your bank you
- 00:59
know breaking up with you which is nice because it's tough getting
- 01:02
the It's not you it's me speech from a guy in a bowtie [Man wearing bow tie talking to a man in the bank]
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