Explain whether this loan would be considered a Qualified Mortgage based on points and fees.
Understand the Problem
The question is asking us to determine if the mortgage loan qualifies as a Qualified Mortgage (QM) based on the points and fees structure. We will analyze the points and fees compared to the QM standards to assess eligibility.
Answer
Points and fees must not exceed 3% of the loan amount for Qualified Mortgage status.
A loan is considered a Qualified Mortgage if the points and fees do not exceed 3% of the loan amount for loans above $100,000. For loans less than $100,000, higher percentage thresholds are allowed.
Answer for screen readers
A loan is considered a Qualified Mortgage if the points and fees do not exceed 3% of the loan amount for loans above $100,000. For loans less than $100,000, higher percentage thresholds are allowed.
More Information
Qualified Mortgages are loans that meet certain federal guidelines designed to avoid risky lending practices. One of these requirements involves maintaining points and fees below specific thresholds.
Tips
A common mistake is miscalculating the percentage of points and fees against the loan amount, especially for loans less than $100,000, where different thresholds apply. Always verify the loan amount to apply the correct threshold.
Sources
- What is a Qualified Mortgage? | Consumer Financial Protection - consumerfinance.gov
- Qualified Mortgage (QM) highlights - MGIC - mgic.com
