What is a 'Take-Out Loan'

A type of long-term financing (usually) on a piece of real property. Long-term take-out loans replace interim financing, such as a short-term construction loan. They are usually mortgages with fixed payments that are amortizing.

BREAKING DOWN 'Take-Out Loan'

Take-out loans can be used for commercial real estate such as office buildings or other income-producing property. Zero-coupon mortgages are a new type of take-out loan. These loans require that interest and principal be paid in a single balloon payment at maturity.

RELATED TERMS
  1. Takeout Value

    The estimated value of a company if it were to be taken private ...
  2. Back-to-Back Commitment

    A commitment to make a second take-out loan that piggybacks another ...
  3. Term Loan

    A loan from a bank for a specific amount that has a specified ...
  4. Combination Loan

    1. A transaction consisting of two separate loans for the same ...
  5. Non-Amortizing Loan

    A type of loan in which payments on the principal are not made, ...
  6. High Ratio Loan

    A loan of any type for which a relatively small down payment ...
Related Articles
  1. Investing

    Commercial Real Estate Loans

    Obtaining a commercial real estate loan is quite different from borrowing for residential real estate. Here's what to expect and how to get what you need.
  2. Investing

    Financial Institutions: Stretched Too Thin?

    Find out how to evaluate a firm's loan portfolio to determine its financial health.
  3. Managing Wealth

    Hard Money Loans: Know This Tool for Real Estate Investors

    A hard money loan may be a faster route to financing than a bank loan, but be sure you understand the pluses and minuses before you take one on.
  4. Personal Finance

    Reduce Interest With An All-In-One Mortgage

    "Offset" mortgages combine a checking account, home-equity loan and mortgage into one account.
  5. Personal Finance

    Understanding Loans

    A loan is the act of giving money, property or other material goods to another party with the expectation of being repaid.
  6. Personal Finance

    Mortgage Amortization Strategies

    Should you get a 30-year mortgage? A 15-year one? Ways to decide which mortgage is the best fit.
  7. Investing

    How Balloon Payments Work

    30-year mortgage borrowers will typically make equal payments over 30 years until the loan’s principal and interest have been paid. A loan’s interest rates will likely be lower if it includes ...
  8. Personal Finance

    Personal Loans vs. Car Loans

    How to tell whether a personal loan or a car loan is better for you.
  9. Personal Finance

    All About Government Loans

    There are many reasons to seek a government loan rather than one from a private lender. Government loans typically have low interest rates and offer fixed or subsidized options, as well as deferred ...
  10. Personal Finance

    The New Mortgage Business: More Than Just Loans

    Many mortgage brokers adapted to the post-subprime environment by becoming loan modification specialists.
RELATED FAQS
  1. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ... Read Answer >>
  2. Are secured personal loans better than unsecured loans?

    Read about the differences between secured loans and unsecured loans and how they are used. Learn about forms of collateral ... Read Answer >>
  3. What are the pros and cons of consolidating my student loans?

    Read about the possible advantages and disadvantages of consolidating your student loan debts, and find out how to determine ... Read Answer >>
  4. Are direct consolidation loans subsidized?

    Direct Consolidation Loans are not subsidized. Students borrow Direct Subsidized Loans to pay tuition, room and board at ... Read Answer >>
Trading Center