Explain whether this loan would be considered a Qualified Mortgage based on points and fees.
Understand the Problem
The question is asking for an analysis of whether a specific loan meets the criteria to be classified as a Qualified Mortgage, focusing primarily on points and fees. To determine this, we need to evaluate the total points and fees in relation to the loan amount and consider the implications of changes in the loan term and corresponding APR adjustments.
Answer
Points and fees must not exceed 3% of the loan amount.
For a loan to be considered a Qualified Mortgage, the points and fees must not exceed 3% of the loan amount.
Answer for screen readers
For a loan to be considered a Qualified Mortgage, the points and fees must not exceed 3% of the loan amount.
More Information
In certain cases, loans under $100k have higher thresholds for points and fees percentage to qualify as a Qualified Mortgage.
Tips
A common mistake is not considering exceptions for smaller loan amounts where higher points and fees are permissible.
Sources
- Basic guide for lenders - What is a Qualified Mortgage? - files.consumerfinance.gov
- What is a Qualified Mortgage? | Consumer Financial Protection Bureau - consumerfinance.gov
- Qualified Mortgage (QM) highlights - MGIC - mgic.com
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