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.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which information is NOT required to be included in an AfBA disclosure?
A lender quotes an APR of 4.25% on a mortgage loan, but the actual APR calculation results in 4.28%. Under TILA's APR accuracy tolerance, is this disclosure compliant?
Which of the following fees would NOT be included in the finance charge calculation under TILA?
For a purchase money mortgage with a loan amount of $400,000, which of the following represents the correct method for calculating the APR?
A lender provides a borrower with initial TILA disclosures showing an APR of 4.5%. Due to market changes, the final APR at closing is 4.625%. What disclosure requirement applies?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Related Study Resources
Previous Question
A lender's policy requires all applicants to provide tax returns, but makes an exception for applicants with income over $200,000 who can provide alternative documentation. An applicant earning $150,000 claims this policy discriminates based on income level. Under ECOA:
Next Question
A lender's radio advertisement states 'Get a $300,000 mortgage with payments as low as $1,200 per month.' What additional disclosure is required under TILA's advertising requirements?