Hi Gwen, a construction takeout mortgage refers to the second mortgage in a two-part mortgage process.
Here's how it works:
1. The first mortgage is known as a "construction loan" which is a short term mortgage used to build a property. You borrow to build the property, then you must pay this specialist construction lender back right away.
2. The takeout mortgage is the long-term follow-up mortgage, which is used to pay off the construction loan lender, and then to serve as the long-term mortgage going forward.
Hope that helps!