Definition of "Commitment fee"

Dawna Stone real estate agent

Written by

Dawna Stoneelite badge icon

The Property Shoppe of Central Florida, Inc.

Charge by the lender to keep credit available to the potential borrower. Once the loan is made, interest is charged on the amount borrowed. Real estate businesses often need money available for land development and building construction. Typically, the bank will charge a commitment fee on those funds.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

Heating system dependent upon radiators in each room of the structure. The steam goes form the boiler through pipes to the radiators. A two-pipe system should be employed for larger ...

(1) Provided by a commercial or savings bank to the real estate company itself or to another party for documentation purposes. Such a letter may be needed by a prospective condominium owner ...

External top of a structure such as for an office building or house. ...

A type of real estate investment trust (REIT) that does not own property but gives short-term financing for construction loans or for permanent mortgage loans for major projects. ...

Availability of land in an urban area. ...

Trading of two or more properties containing separate descriptions and separate financial statements. ...

How much the rental property is worth. The valuation considers the net income derived from the property and a capitalization rate. ...

The American Planning Association, also known as APA, is a nonprofit professional organization representing the US’s urban planning field. The APA provides extensive educational ...

One-story house with a low pitched roof often having an open floor plan. ...

Popular Real Estate Questions