Qualified Mortgages (QM) Flashcards
1
Q
The maximum debt-to-income ratio for a Qualified Mortgage is ____.
A
43%
2
Q
Qualified Mortgages cap points and fees at ______
A
3% or 3 points
3
Q
Loan terms over ______ are prohibited for Qualified Mortgages.
A
30 years
4
Q
What two types of loans are prohibited as QMs
A
Interest Only loans and Negative Amortization loans
5
Q
________ penalties are prohibited in QMs except for certain fixed rate qualified loans.
A
Prepayment penalties
6
Q
Creditors must consider what 8 types of information when establishing a borrowers ability to repay (ATR) a mortgage loan?
A
- Current income or assets
- Current employment status
- Borrower’s credit history
- Monthly payment for the mortgage
- Borrower’s monthly payments on other simultaneous mortgage loans
- Monthly payments for other mortgage related expenses
- Other debts of the borrower
- Monthly debt payments compared to the borrowers monthly income (DTI cannot exceed 43%)
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%