Bulletin: CT2011001

Example 1. 

New loan for $200,000 secured by a mortgage on a one- to four-family residential property. Proceeds will pay off an existing loan from 2005 whose original amount was $170,000.
 

Old rate:

The transaction qualifies for the refi discount of forty percent (40%), the paid-off mortgage being less than ten years old, but only to the extent of the original amount of the paid-off mortgage ($170,000). The full loan policy premium rate would be charged on the excess over $170,000.

New rate:

The age of the paid-off mortgage does not matter, nor does the fact that the new loan amount exceeds the paid-off loan amount. The discount of forty (40%) is applied to the full amount of the new mortgage, $200,000.

Example 2. 

New loan for $200,000 secured by a mortgage on a one- to four-family residential property. Proceeds will pay off an existing loan from 1998 whose original amount was $170,000.
 

Old rate:

Because the mortgage being paid off is more than ten years old, the refi discount of forty percent (40%) was not available. The full loan policy premium rate on a mortgage of $200,000 would be charged.
 

New rate:

The age of the paid-off mortgage does not matter, nor does the fact that the new loan amount exceeds the paid-off loan amount. The discount of forty (40%) is applied to the full amount of the new mortgage, $200,000.
 

Example 3. 

New loan for $200,000 secured by a mortgage on an unimproved lot in a residential subdivision, with proceeds being used for construction of a dwelling.
 

Old rate:

Because the proceeds of the new mortgage are not being used to pay off an existing mortgage, the refi discount rate was not available.
 

New rate:

No change.The new rate is not available on new-construction loans.
 

Example 4. 

New loan for $2,000,000 secured by a mortgage on commercial property. Loan proceeds will be used to pay off existing mortgage of $1,500,000.
 

Old rate:

Refi rate discount of forty percent (40%) applies to the first $1,500,000 of the new loan. Full loan rate charged on excess of $500,000.
 

New rate:

No change.The new rate is not available for policies insuring mortgages on commercial properties.
 

Example 5. 

New loan for $200,000 secured by a mortgage on a one- to four-family residential property granted by Blackacre, LLC, the current owner of the property, which acquired the property from Bob Blackacre in 2010. Loan proceeds will be used in part to pay off existing mortgage of $170,000 granted in 2007 by Bob Blackacre, the former owner.
 

Old rate:

Because Bob Blackacre had quitclaimed the property to his LLC after mortgaging it, the refi discount of forty percent (40%) was not available. The full loan policy premium rate on a mortgage of $200,000 would be charged.
 

New rate:

It does not matter that there has been a change in ownership, nor does it matter that the new loan amount exceeds the paid-off loan amount. The discount of forty percent (40%) is applied to the full amount of the new mortgage, $200,000.
 

Example 6. 

New equity line of credit for $100,000 secured by a mortgage on a one- to four-family residential property.
 

Old rate:

Because the proceeds of the new mortgage are not being used to pay off an existing mortgage, the refi discount rate was not available.
 

New rate:

The fact that no proceeds are being used to pay off an existing mortgage does not matter. The discount of forty (40%) is applied to the full amount of the new mortgage, $100,000.