What is the difference between mortgage approval letter (not pre-approval) & commitment letter?

commitment letter according to this source:

A loan commitment letter is an indication that the buyer’s home loan has been approved. It is different from a lender pre-qualification letter, which indicates that a lender has reviewed some preliminary information provided by the borrower verbally, but has not yet reviewed financial documentation. It is also different from a pre-approval letter, which indicates that the lender has reviewed financial documents and is awaiting final review and appraisal for a particular home purchase.

I'm curious if mortgage lender can decline the loan after both approval letter & commitment letter were issued?

  • Until they give the money, you don't have a loan. What are you going to do? Sue them for not loaning money to you? Get huskies to lick them to death? A loan commitment letter is not a contract because you have given them nothing. Apr 14, 2019 at 2:18

1 Answer 1


If the mortgage lender discovers you've lied on your application or acted fraudulently they can decline the application at any time.

If your personal circumstances change in a material way e.g. you lose your job then that may cause the lender to reevaluate too as would something material happening to the property they are due to lend on.

Commitment letters are rarely unconditional. You may only be doing this a few times in your lifetime, to a bank it's their day job and they need to cover for all uncertainties because given the number of loans they process something will go wrong with someone's loan somewhere at the last minute.

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