Explain whether this loan would be considered a Qualified Mortgage based on points and fees.
Understand the Problem
The question is asking whether the mortgage loan obtained by Lana and Vien Tran would qualify as a Qualified Mortgage based on the points and fees charged. This involves analyzing the loan details, including the APR and changes made prior to closing, to determine compliance with the regulatory standards for Qualified Mortgages.
Answer
Points and fees must not exceed 3% of the loan amount for a Qualified Mortgage.
A loan is not considered a Qualified Mortgage if the points and fees exceed 3% of the loan amount.
Answer for screen readers
A loan is not considered a Qualified Mortgage if the points and fees exceed 3% of the loan amount.
More Information
Qualified Mortgage rules are designed to protect borrowers and ensure they can repay their loans. Loans with points and fees below 3% avoid practices that could lead to risky lending.
Tips
Misunderstanding loan thresholds for points and fees could lead to inaccurate determinations of Qualified Mortgage status.
Sources
- Basic guide for lenders What is a Qualified Mortgage? - files.consumerfinance.gov
- What is a Qualified Mortgage? - Consumer Financial Protection Bureau - consumerfinance.gov
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