Takeout commitments(banking) Law and Legal Definition

A takeout commitment is an agreement between a mortgage banker and a long-term investor by which the investor agrees to purchase a mortgage at a specific future date. The investor is called the take out lender. Usually a take out lender is an insurance company or other financial institution. A takeout commitment is made to provide a long-term financing arrangement to replace an interim short term loan. A takeout must be in place before interim lenders agree to provide bridge loan.