Mortgage Application and Commitment Letter

The two most critical deadlines for your financial protection are those associated with the deadline by which you must apply for a mortgage, and the date by which your lender must provide you with an unconditional commitment letter.  Being aware of these deadlines is of the utmost importance to make sure you are reimbursed all of your deposit money in the event your mortgage application is ultimately denied.  The mortgage application deadline is generally set to coincide with the date of the signing of the P&S, or at least within a few days on either side.  It is a good idea to ask your lender for an email or some other form of documentation evidencing the fact that you have applied for a mortgage in the eyes of the lender as of “x” date.  The mortgage commitment letter is a document provided by the lender after it has reviewed and processed your mortgage application and is the lender’s notice to you that it has approved your application and is “committing” to providing you the mortgage requested.  Lenders, unfortunately, often issue conditional commitment letters which still have a series of conditions which  must be met before the lender will issue the mortgage.  Such conditional letters are essentially useless for purposes of the commitment letter deadline (and your ability to get your money back if necessary).  You should be in regular contact with your lawyer as the commitment letter deadline approaches, and make sure to have your lawyer review any commitment letter you receive to confirm it is satisfactorily unconditional.