At what point to you get a commitment letter from your lender?

Can you get it before you give them a deposit for their early costs (ie appraisal, inspection)? Of course I'd like to know they are saying "yes" to the deal before I put down money. Is there sort of an "early commitment" without putting down money or are you "in" with deposit money before you know the bank will do the deal?
In Buying Property - Asked by Larry K. - Feb 3, 2010
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Kevin R.
Lender/Mortgage Broker
Tampa, FL

Larry, many lenders require an "expense deposit" when they issue a term sheet and start processing your loan. They then underwrite the loan and hopefully approve it. Once the loan is approved and the borrower signs the commitment letter the lender will use the "expense deposit" funds to order third party reports such as appraisal, environmental, etc.
So YES, it is possible to get a commitment letter before spending any significant money for third party reports.

Feb 3, 2010
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Brandi L.
Oak Brook, IL

Larry, My experience is that you may be able to get a letter of qualification before undertaking the appraisal and inspection but the commitment letter will not be issued until underwriting has accepted the deal and they will need the appraisal to do so. I have found that this takes about 5 weeks from application. The inspection is for your benefit as part of your due diligence. Jim

Feb 3, 2010
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Gregory G.
Broker/Agent
San Francisco, CA

You can get a letter of interest... but letter of commitment will be hard to get without some cost.
Gregory Garver - Commercial Real Estate Broker
Broker License# 01716531
(415)968-6065
gregory.garver@gmail.com

Feb 26, 2010
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