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Take-Out Commitment

What is '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.

Explaining '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."


Further Reading


Loan commitments and private firms
papers.ssrn.com [PDF]
… loans, and firms take out new lines … Dinc, S., 2000. “Bank reputation, bank commitment, and the effects of competition in credit markets,” Review of Financial Studies, 13(3), 781-812. Duan, JC, and SH Yoon, 1993. “Loan commitments, investment decisions and the …

Why soft law dominates international finance—and not tradeWhy soft law dominates international finance—and not trade
academic.oup.com [PDF]
… loans, and firms take out new lines … Dinc, S., 2000. “Bank reputation, bank commitment, and the effects of competition in credit markets,” Review of Financial Studies, 13(3), 781-812. Duan, JC, and SH Yoon, 1993. “Loan commitments, investment decisions and the …

Fee-based pricing of fixed rate bank loan commitmentsFee-based pricing of fixed rate bank loan commitments
www.jstor.org [PDF]
… loans, and firms take out new lines … Dinc, S., 2000. “Bank reputation, bank commitment, and the effects of competition in credit markets,” Review of Financial Studies, 13(3), 781-812. Duan, JC, and SH Yoon, 1993. “Loan commitments, investment decisions and the …

Financial markets as a commitment device for the governmentFinancial markets as a commitment device for the government
cadmus.eui.eu [PDF]
… loans, and firms take out new lines … Dinc, S., 2000. “Bank reputation, bank commitment, and the effects of competition in credit markets,” Review of Financial Studies, 13(3), 781-812. Duan, JC, and SH Yoon, 1993. “Loan commitments, investment decisions and the …

Early Commitment Financial Aid Programs: Promises, Practices, and Policies.Early Commitment Financial Aid Programs: Promises, Practices, and Policies.
eric.ed.gov [PDF]
… loans, and firms take out new lines … Dinc, S., 2000. “Bank reputation, bank commitment, and the effects of competition in credit markets,” Review of Financial Studies, 13(3), 781-812. Duan, JC, and SH Yoon, 1993. “Loan commitments, investment decisions and the …

The economics and culture of financial inflationThe economics and culture of financial inflation
journals.sagepub.com [PDF]
… loans, and firms take out new lines … Dinc, S., 2000. “Bank reputation, bank commitment, and the effects of competition in credit markets,” Review of Financial Studies, 13(3), 781-812. Duan, JC, and SH Yoon, 1993. “Loan commitments, investment decisions and the …

Loan commitments and monetary policy∗Loan commitments and monetary policy∗
www.sciencedirect.com [PDF]
… loans, and firms take out new lines … Dinc, S., 2000. “Bank reputation, bank commitment, and the effects of competition in credit markets,” Review of Financial Studies, 13(3), 781-812. Duan, JC, and SH Yoon, 1993. “Loan commitments, investment decisions and the …

Outside equity financingOutside equity financing
www.nber.org [PDF]
… loans, and firms take out new lines … Dinc, S., 2000. “Bank reputation, bank commitment, and the effects of competition in credit markets,” Review of Financial Studies, 13(3), 781-812. Duan, JC, and SH Yoon, 1993. “Loan commitments, investment decisions and the …



Q&A About Take-Out Commitment


What is a take-out commitment?

A take-out commitment is a mortgage purchase agreement.

What does it mean to enforce a take-out commitment?

Once a project reaches a particular stage where long term financing is preferred over short term financing, the lender will enforce the contract.

Who are the 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."

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