Document background
The Mortgage Commitment Letter is a crucial document in Philippine real estate financing that bridges the gap between loan application and final mortgage execution. It is issued after a lender has evaluated and approved a borrower's mortgage application but before the final loan documents are signed. The letter details all essential aspects of the approved mortgage, including loan amount, interest rates, payment terms, and conditions that must be met before fund disbursement. This document, regulated by the Bangko Sentral ng Pilipinas and subject to the Truth in Lending Act, serves multiple purposes: it provides borrowers with written confirmation of the loan approval, outlines all terms and conditions for their review, and serves as a temporary guarantee for other parties involved in the transaction. The Mortgage Commitment Letter is particularly important in Philippine real estate transactions as it often serves as a requirement for property developers and sellers to proceed with property reservations or sales.
