Finance
In South Carolina, what is the primary purpose of a 'mortgage commitment letter'?
AA final approval with all conditions cleared, binding the lender to provide the specified loan✓ Correct
BA preliminary indication that the borrower may qualify for a loan
CA marketing document from the lender
DA commitment to accept the property as collateral
Explanation
A mortgage commitment letter is a formal, written commitment from a lender to provide a specific loan, subject to listed conditions. It is stronger than a pre-approval and is used to satisfy financing contingencies in purchase contracts.
People Also Study
Related South Carolina Questions
- What is the secondary mortgage market's primary function in South Carolina real estate financing?Finance
- In South Carolina, 'points' paid on a mortgage loan are typically tax-deductible for a primary residence because they represent:Finance
- In South Carolina, a lender who makes a mortgage loan with an interest rate more than 8 points above the prime rate may be required to comply with:Finance
- In South Carolina, a mortgage lender must provide the Loan Estimate to a borrower within how many business days of receiving a complete loan application?Finance
- A South Carolina property was appraised at $445,000. The lender requires an 80% LTV. The purchase price is $450,000. What is the maximum loan amount?Real Estate Math
- In South Carolina, which clause in a purchase contract allows a buyer to withdraw if they cannot obtain financing?Contracts
- What is the primary purpose of a buffer zone in South Carolina land use planning?Land Use & Zoning
- An 'acceleration clause' in a South Carolina mortgage allows the lender to:Contracts
Key Terms to Know
Pre-Approval
A lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Study This Topic
Practice More South Carolina Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free South Carolina Quiz →