A borrower has a monthly gross income of $8,000. Their existing monthly debt payments total $2,000, and the proposed mortgage payment (including principal, interest, taxes, and insurance) will be $2,500. What is the borrower's debt-to-income ratio for QM purposes?
Correct Answer
D) 56.25%
For QM DTI calculations under 12 CFR 1026.43(e)(2)(vi), the ratio includes all monthly debt obligations. Total monthly debt = $2,000 (existing) + $2,500 (proposed mortgage) = $4,500. DTI = $4,500 ÷ $8,000 = 56.25%. This exceeds the 43% QM limit.
Why This Is the Correct Answer
For QM DTI calculations under 12 CFR 1026.43(e)(2)(vi), the ratio includes all monthly debt obligations. Total monthly debt = $2,000 (existing) + $2,500 (proposed mortgage) = $4,500. DTI = $4,500 ÷ $8,000 = 56.25%. This exceeds the 43% QM limit.
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