Do You Know What A Loan Commitment Letter Is? 

Let’s chat about why you need a loan commitment letter! When it comes to finding the perfect home, you likely have a distinct vision in your head. You probably know what kind of kitchen you want, the type of master suite you’d like and how many bedrooms you need. As boring as it may be, you probably should be spending more time considering the financial aspects of your new home. The reality is that most folks will need a mortgage, but is it really as simple as calling the first lender that pops up on Google?

In terms of getting approved for a loan, you probably know to shop for the lowest interest rate possible. Additionally, you likely already know the advantages and disadvantages of having a 15-year or 30-year mortgage. As simple as it may seem, there are more components to consider! In this blog post, we’re discussing why it is important for homeowners to get a formal loan commitment letter. Many people don’t even know about this type of documentation. In this blog post, we hope to shed light on why you should work with a lender who is willing to provide you with a loan commitment letter!


Pre-Qualified VS. Pre-Approved VS. Loan Commitment Letter 

If you’ve been pre-qualified for a mortgage, you might think you’re in the clear to begin the house-hunting or home building process. However, a pre-qualification is merely an estimate of what you can afford based on what you say you earn each year. A pre-approval letter is a more extensive process that determines how much of a loan you are eligible for based on your income, assets, debt and credit score. Finally, once you find a home you love or a property you intend to build on, you’ll want a formal loan commitment letter. This ensures that funds will be readily available when you need them. For inquiries or clarification, contact the team at Groundwork Mortgage.


Pre-Qualified – An Estimate Of What You Might Be Able To Afford

We’ve all heard of the term “pre-qualified”, but what does that really mean? In short, a pre-qualification for a mortgage is a verbal confirmation of what you could qualify for based on what you say you earn each year. It is nothing more than an estimate for what you could potentially qualify for. For instance, many couples will combine their work salaries to determine their household income. However, often household incomes are slightly lower or higher than what people think they are.

A pre-qualification is essentially a lender typing your income and down payment amount into a calculator and offering you an estimate of what you could potentially afford. It merely indicates that you could be granted a mortgage. Don’t get me wrong, getting pre-qualified is a great first step! With that said, you’ll want to find a lender who is willing to get you pre-approved and provide you with a formal loan commitment letter! 


Pre-Approved – A Loan Pre-Approval Amount 

Getting pre-approved for a mortgage is a formal agreement between you and a lender. This process is more thorough than a pre-qualification estimate. Your lender will review your employment history, annual income, debt, credit score, assets and more. A pre-approval letter is a major step-up from a pre-qualification estimate. However, this does not mean that a lender is guaranteeing funds of any kind. In order to guarantee that you will have the funds available when you need them, you’ll want a formal loan commitment letter.


Loan Commitment Letter – A Specific Lender Has Agreed To Give You The Loan

A loan commitment letter is the only way you can guarantee that funds will be available with a specific lender. This document sets up the borrower with the highest state of readiness to purchase a home. Getting a loan commitment letter takes much longer than getting pre-approved or pre-qualified. This is because this process is more thorough and provides much more weight, as a specific lender is officially agreeing to give you the loan! 

To get a loan commitment letter, the lender will perform a full underwriting that will verify that a homeowner is qualified to receive a loan. They will look even further into your credit history, assets, debts, and so on. The commitment letter includes the type of loan, the interest rate, the term of the loan, and even more details than the pre-approval letter included. You want a commitment letter because you want to make sure that funds are available when you need them! Loan commitment letters have an expiration date to ensure that closing happens quickly or the building of your home promptly begins. It is in your best interest to work with a lending professional who will gladly help you obtain this document.


Get Your Loan Commitment Letter From Groundwork Mortgage!

Are you looking for a lender you can trust? Hearthside Homes is proud to refer our services to Groundwork Mortgage. The team at Groundwork Mortgage actually works in the same building as we do! We are happy to continue to refer their services to our clients because of their excellent customer services and willingness to go the extra mile. Their mission is to get you the best interest rate possible while giving you a fuss-free lending experience!

If you have any questions regarding a loan commitment letter, please feel free to contact Mortgage Loan Officer, Brett Greble (NMLS #1761928), at (816) 560-7582 or His office is located at 1915 Industrial Drive (Suite 200), Liberty, MO 64068. If you are in the early stages of getting pre-qualified, text this number for assistance (816) 203-1407. Additionally, feel free to check out the mortgage payment calculator on their website. This will give you a great idea as to how much you are likely able to afford. Good luck on your home buying journey! 


About The Author 

For those of you who are stumbling across our blog for the first time, welcome to Hearthside Homes! We’re thrilled that you have landed on our website. Hearthside Homes is a Liberty-based home builder. We currently build homes in Kansas City, Liberty, Kearney and Parkville. Our customers either purchase a move-in ready spec home or they build a semi-custom home with us from start to finish! You may be wondering exactly what a “semi-custom” home is. In short, a customer can choose one of our awesome floor plans and then customize the space by making material selections at our Design Center. Inside and out, from top to bottom, our clients have a great time making their home unique to their style. 

Our mission is to make the home building experience easy and fun! Once you choose a community and floor plan you love, you’ll make your material selections at our Design Center located at 1915 Industrial Dr #300, Liberty, MO 64068. From flooring to paint, tile, cabinetry, backsplashes and beyond, you’ll love getting to choose all the features for your new home! From the time we break ground, you can expect your home to be move-in ready in just six months! Seriously! To learn more about our home building process, click here. To request to be contacted by one of our experts, fill out this form on our website. For inspiration, follow us on Facebook and Instagram! We hope that you’ll soon become a #happyhearthsidehomeowner!