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SECTION 12 - CONSTRUCTION
LOAN INSURANCE
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The construction mortgage rate is the owner's rate. A policy insuring
a construction mortgage shall not be issued for less than the face
amount of the construction mortgage and the rate, based on the full
amount of the construction mortgage, must be paid at the time of
the first advance. The rate shall include the cost of the first
five continuations during the life of the construction mortgage.
An additional charge of $200 for each subsequent title continuation
search beyond the fifth shall be made and collected at the time
of each such continuation.
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Where there is no change in the ownership of the fee estate or leasehold
estate and no change in the ownership of the mortgage, the premium
for a policy or endorsement insuring the conversion of an existing
construction mortgage to a permanent mortgage shall be thirty percent
(30%) of the loan rate. Additional insurance in excess of the amount
of the construction loan shall be calculated at the full loan rate.
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Where there is no change in the ownership of the fee estate or leasehold
estate and there is a change of ownership of the mortgage, the premium
for a policy or endorsement insuring the conversion of an existing
construction loan mortgage to a permanent mortgage shall be seventy
percent (70%) of the loan rate. Additional insurance in excess of
the amount of the construction mortgage shall be calculated at the
full loan rate.
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Where there is a change of ownership of the fee estate or leasehold
estate, the premium for a policy or endorsement insuring the conversion
of an existing construction loan mortgage to a permanent mortgage
shall be calculated at the full loan rate.
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