Within the state of Florida, there are multiple rates that can be used for a Refinance. This article will explain each rate, how they are calculated and how LodeStar will quote them.
- REISSUE RATE: Original debt and loan amount are primarily considered per the manual "Any amount of new insurance [loan amount], in the aggregate, in excess of the amount under the previous policy [original debt] shall be computed at the original owner’s or leasehold rates."
- SUBSTITUTION RATE: Original debt, existing debt and loan amount are primarily considered for the substitution rate. Per the manual "...the unpaid principal balance of the previous loan [existing debt]will be considered the amount of insurance..... these rates shall be added the regular rates....for any new insurance, that is, the difference between the unpaid principal balance of the original loan [original debt] and the amount of the new loan [loan amount]"
By default, LodeStar will quote the Refinance Rate. Substitution rates are applicable if the policy is over $250,000 or when the policy is refinanced with the same lender. LodeStar will automatically include the "date of prior policy" and "estimated Date of Closing" input boxes if the loan amount is over $250,000.
If the loan amount is not over $250,000, those two boxes will not appear. If the Substitution rate is to be used, the user needs to check the "Should the substitution rate be used (proof of previous policy required)?" checkbox and enter in the dates.