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In this video, the host discusses the concept of a commitment letter in real estate. A commitment letter is a binding offer from a lender that includes the mortgage amount, interest rate, and repayment terms. It is conditional, meaning the lender will fund the mortgage once certain conditions are met within a specific timeframe. Common conditions include providing additional documents, maintaining credit score and income, having homeowner's insurance, and making the required down payments. To ensure a smooth transaction, it is essential to meet these conditions.