© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Commitment Letter


So you need dough—but you don't need it today. You need it in 6 months when your cabin by the lake will be done and you convert your very expensive building loan into a normal mortgage. Well, you can go to the bank and, for a small(ish) fee, get a commitment letter which stipulates that, assuming that nothing material changes between now and then, you will in fact get a loan for $152,000 at 5% fixed interest for 30 years.