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What happens if you miss your Loan Commitment Deadline?

Our loan just got sent to underwriting last Friday.  Our commitment letter is due this Friday.  When I mentioned getting a commitment letter per our contract our LO implied it was no big deal and that he had in essence given us one when he gave us a pre-approval letter.  That didn't sound right no me.  What happens if we miss the deadline for this letter?   
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June 28 2011 - US
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Answers (3)

Profile picture for Moooommmy
Thank you for your responses.  I just found out today that our loan wasn't sent to underwriting until yesterday!  

My LO called me yesterday to tell me me that he "got the approval you were looking for".  I got suspicious because he had also said "now we can send it over to GMAC".  I called this morning to find out that we were only "approved" by the computer and our loan was still in  underwriting.  We are going to have to ask for an extension. I am so frustrated with everything right now.  I started discussing this commitment date with my LO three weeks ago and yet no one seemed to understand the importance until now.  


I feel like I am at a used car dealership with a salesman telling me anything to keep me in the showroom.
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June 29 2011
In the mind of some professionals, a pre-approval letter should be printed in two ply format so as to have multiple uses. The pre-approval is NOT the same as a commitment letter as a pre-approval letter hasn't been passed under the noses of the underwriters.

If  you miss the deadline and your lender then decides you aren't getting the loan then you can no longer exercise the 'out' on your financing addendum and would potentially lose your earnest money or more.

If you are working with a Realtor, mention to them what your loan officer told you and the importance of having the loan commitment  in place before this Friday.
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June 28 2011
You do not want to pass your loan commitment deadline without a loan commitment.  It is one of your last outs for getting your earnest money back if you do not received loan approval.  But more importantly, loan approval is not loan commitment.  The commitment comes once the loan approval has been issued and all the underwriting conditions have been met.  I would ask your realtor for an extension on the loan commitment deadline until you can get a definitive answer.  I would not risk my money or your money.   
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June 28 2011
 
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