The Pre-Approval letter is the letter from the lender, stating that a buyer is approved to look at homes within a certain price range based on their debt to income ratio. Loan commitment happens during the transaction. Once the lender has received all the additional paperwork and information from you, they send it to their underwriter. While your application is in underwriting, the mortgage company is assessing the risk of taking you on as a borrower. If the risk is minimal and the mortgage company agrees to give you the loan to buy the home, they will issue loan commitment. After this has been issued, the mortgage company is on the hook to give you the loan and then after you sign all their documents at closing, you are then on the hook to pay the loan back.