Take-Out Lender

See: Take-Out Commitment.

Mortgages are like dates at a square dance. They start switching partners once the music starts.

Mortgages change hands all the time, as banks buy the loans from one another. These deals often take the form of take-out commitments, which consist of one party agreeing to buy a mortgage from another at some set point in the future.

The party purchasing the mortgage in those deals is known as the take-out lender. Typically, it's another bank or other financial institution, though insurance companies or even individual investors sometimes get into the mix as well.