back-to-back commitment

Definition

A commitment to make a second loan when the terms of a first loan are satisfied. One common type of back-to-back commitment involves replacing a construction loan with a first mortgage. A bank may extend a construction loan to build a house, with the understanding that once the house is built, the construction loan will be paid off and replaced by a mortgage.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
backtest back-to-back letters of credit