DEFINITION of 'Take-Out Commitment'

A specific type of mortgage purchase agreement. Under a take-out commitment, a long-term investor agrees to buy a mortgage from a mortgage banker at a specific date in the future. Take-out commitments are enforced once a project reaches a particular stage where long-term, rather than short-term, financing is the preferred alternative.

BREAKING DOWN 'Take-Out Commitment'

There are a few specific types of investors that purchase take-out commitments. In most cases, these are insurance companies or other financial institutions. They are known as "take-out lenders."

RELATED TERMS
  1. Take-Out Lender

    A type of financial institution that provides a long-term mortgage ...
  2. Take-Out Loan

    A type of long-term financing (usually) on a piece of real property. ...
  3. Takeout Value

    The estimated value of a company if it were to be taken private ...
  4. Takeout

    A slang term denoting the purchase of a company through an acquisition, ...
  5. Primary Mortgage Market

    The market where borrowers and mortgage originators come together ...
  6. Second Mortgage

    A type of subordinate mortgage made while an original mortgage ...
Related Articles
  1. Personal Finance

    Shopping for a Mortgage in 2017? Use This Tool First

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2017 can all be done online.
  2. Personal Finance

    Behind the Scenes of Your Mortgage

    Four major players slice and dice your mortgage in the secondary market.
  3. Personal Finance

    5 Things You Shouldn't Tell Your Mortgage Broker

    Applying for a mortgage can be a strenuous process. Here are five things to avoid doing when meeting with your mortgage broker.
  4. Trading

    Bullish Technicals Predict Twitter Takeout (TWTR)

    Twitter has broken out on heavy volume in reaction to takeout rumors that are likely to presage a profitable company sale.
  5. Personal Finance

    Finding the Best Mortgage Rates in 2017

    As home-buying technology has progressed, the process of finding the best mortgages rates can all be done online. Here's how:
  6. Personal Finance

    5 Reasons To Save For A Big Mortgage Down Payment

    You may be anxious to buy a home, but taking time to save a large down payment has numerous advantages.
  7. Personal Finance

    7 Mortgage Trends To Expect In 2011

    How will the year compare to 2010? What's likely to be different?
  8. Investing

    The Most Important Factors that Affect Mortgage Rates

    Discover what the most important factors are that affect mortgage interest rates. Factors range from inflation and economic growth to Federal Reserve activity, .
  9. Personal Finance

    Comparing Reverse Mortgages vs. Forward Mortgages

    Which one a homeowner chooses depends on where you are at this point in your life, personally and financially.
  10. Personal Finance

    Mortgage Company

    A company engaged in the business of originating and/or funding mortgages for residential or commercial property.
RELATED FAQS
  1. If My Mortgage Lender Goes Bankrupt, Do I Still Have to Pay My Mortgage?

    Yes, if your mortgage lender goes bankrupt you do still need to pay your mortgage obligation. Here's what usually happens ... Read Answer >>
  2. What are the pros and cons of a simple-interest mortgage?

    Learn the difference between a simple interest mortgage and a standard mortgage, along with their relative advantages and ... Read Answer >>
  3. What are the different types of subprime mortgages?

    Clarify your understanding of subprime mortgages. Learn about the different types, how they work and when they might be beneficial. Read Answer >>
Trading Center