GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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50% - Moderately

Standby Commitment


Synonyms:commitment
Filed Under: financial-banking, mortgages
Tags: banking, mortgage
 

Definition of standby commitment

standby commitment
1. A commitment from a lender to make a loan in a specified period of time on specified terms with the understanding that the borrower will not likely draw down the funds.

Related Terms and Acronyms:

  • bank   An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.
  • commitment   A written agreement from a lender promising to lend money on certain terms for a specified time period.
  • draw period   On a line of credit, the draw period is the fixed time when a borrower can make withdrawals from the account. After the draw period expires, the borrower can renew the credit line or may be required to pay the outstanding balance in full, or over time.
  • firm commitment   A lender's promise to lend money to a specific borrower on specified terms at a certain time.
  • land draw   A construction loan backed by the value of the land.
  • lender   The bank or mortgage company offering the loan.
  • loan   Letting another party use something of value temporarily.
  • loan commitment   A lender's promise to advance a specific sum on specific terms.
  • mortgage (mtg)   A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • rate hold   The length of time, typically between 60 and 120 days, that a lender will guarantee a loan's interest rate once you are locked in.

More Related Terms and Acronyms

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