Key Takeaways
-
A mortgage commitment letter proves to sellers you are financially ready to close.
-
Conditional and firm commitment letters differ in timing and approval certainty.
-
Getting preapproved is the first step toward securing a mortgage commitment letter.
-
In competitive markets, a commitment letter strengthens your offer and negotiation power.
A mortgage commitment letter can be your golden ticket when buying a home. It proves to sellers that you are financially ready and serious about closing the deal. This document, issued by your lender, states their intent to approve your mortgage. However, there are two types of mortgage commitment letters — conditional mortgage commitment letters and firm mortgage commitment letters. Understanding the difference can help you navigate the homebuying process with confidence and avoid delays.
Types of Mortgage Commitment Letters
| Type | When Issued | What It Means |
| Conditional Mortgage Commitment Letter | After mortgage preapproval | Lender intends to finance your purchase if certain requirements are met |
| Firm Mortgage Commitment Letter | After full underwriting | Lender confirms approval for a specific property, interest rate, and loan term |
Conditional Mortgage Commitment Letter
A conditional commitment letter is usually issued after your preapproval. It tells sellers the lender plans to finance your purchase if you meet specific conditions. These may include:
- The home appraising at or above the purchase price
- Satisfactory resolution of inspection issues
- Proof of down payment and closing costs
- Maintaining steady income and credit until closing
The letter typically states your approved loan amount, loan type, and the offer’s validity period. While it is not a final guarantee, it often gives sellers enough confidence to take your offer seriously.
Firm Mortgage Commitment Letter
A firm commitment letter is issued after your offer is accepted and underwriting is complete. It confirms the lender’s commitment to approve your mortgage for a specific property at an agreed interest rate and term.
This letter indicates the lender has:
- Verified your financial documents
- Reviewed the property’s title and appraisal
- Confirmed you meet all lending requirements
While this is the closest step to final loan approval, it still has an expiration date, typically within 30–60 days.
How to Get a Mortgage Commitment Letter
| Step | Description |
| Prequalification | Informal financial review to estimate your potential loan amount |
| Preapproval | Credit check, income verification, and documentation review — leads to a conditional commitment letter |
| Formal Mortgage Application | Full underwriting after offer acceptance — results in a firm commitment letter |
Commitment Letter vs. Preapproval Letter
| Document | Purpose |
| Preapproval Letter | Shows you’re likely to qualify based on preliminary checks |
| Firm Commitment Letter | Confirms the lender is ready to fund your purchase for a specific property |
Why This Matters
In today’s competitive housing market, this letter shows sellers you are a qualified buyer. It also strengthens your negotiating power and reduces the risk of financing falling through before closing.
Next Steps After Receiving Your Commitment Letter
- Track the expiration date and act quickly
- Satisfy any remaining lender conditions without delay
- Avoid major financial changes before closing
- Maintain clear communication with your lender and real estate agent
A mortgage commitment letter is more than just paperwork — it’s a strategic advantage in your homebuying journey. Whether conditional or firm, it positions you as a serious, prepared buyer and helps ensure a smoother path to closing.
FAQs About Mortgage Commitment Letters
No SSN required. Zero impact to credit. Your Information is never sold.