Qualified Mortgages (QM) Flashcards

1
Q

The maximum debt-to-income ratio for a Qualified Mortgage is ____.

A

43%

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2
Q

Qualified Mortgages cap points and fees at ______

A

3% or 3 points

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3
Q

Loan terms over ______ are prohibited for Qualified Mortgages.

A

30 years

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4
Q

What two types of loans are prohibited as QMs

A

Interest Only loans and Negative Amortization loans

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5
Q

________ penalties are prohibited in QMs except for certain fixed rate qualified loans.

A

Prepayment penalties

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6
Q

Creditors must consider what 8 types of information when establishing a borrowers ability to repay (ATR) a mortgage loan?

A
  1. Current income or assets
  2. Current employment status
  3. Borrower’s credit history
  4. Monthly payment for the mortgage
  5. Borrower’s monthly payments on other simultaneous mortgage loans
  6. Monthly payments for other mortgage related expenses
  7. Other debts of the borrower
  8. Monthly debt payments compared to the borrowers monthly income (DTI cannot exceed 43%)
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7
Q

In order to meet the guidelines for a Qualified Mortgage, a loan cannot have total points and fees that exceed __% of the loan amount.

A

6.5%

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