lender's charge for holding credit available. The fee may be waived for some borrowers, and usually is replaced with interest when funds are advanced, as in a revolving credit. In business credit, commitment fees often are charged for an unused portion of a line of credit.
lender's charge for contracting to hold credit available. Fee may be replaced by interest when money is borrowed, or both fees and interest may be charged, as with a revolving credit.
lender's charge for contracting to hold credit available. Fee may be replaced by interest when money is borrowed or both fees and interest may be charged, as with a revolving credit.
a charge required by a lender to lock in specific terms on a loan at the time of application.
Example: When Collins applied for a loan to finance the apartment building she wanted to buy, the mortgage banker agreed to make the loan, at an interest rate of 7% with 2 discount points and covering 80% of value, in exchange for a commitment fee of 1% of the loan amount.
