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Finance a la shmoop what is a commitment letter? dear Rebecca its been fun and all but asking me to move in with you was a real turnoff so uh have a nice [Rebecca reading letter] life yeah that would be a fear of commitment letter I know that one well well so whats a commitment letter then all right well you need dough but you dont need it today you need it in six months when construction is finished on your cabin by the lake at that point youll convert your very expensive building loan into a normal mortgage well you can go to the bank and for a [Man walks into bank] small ish fee get a commitment letter from them which stipulates that assuming nothing material changes between now and then you will in fact then get a loan for one hundred fifty two thousand dollars at 5 percent fixed interest rate for 30 years the bank is then committed to giving you that loan when you know [Contract stamped with committed] eventually you need it that way you dont have to worry about your bank you
