A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Correct Answer
D) $7,500
Under the ATR/QM rule, for loans of $100,000 or more, the points and fees cannot exceed 3% of the total loan amount to qualify as a Qualified Mortgage. For a $250,000 loan, 3% equals $7,500. While the lender wants to charge 1% ($2,500), the question asks for the maximum allowable, which is $7,500.
Why This Is the Correct Answer
Under the ATR/QM rule, for loans of $100,000 or more, the points and fees cannot exceed 3% of the total loan amount to qualify as a Qualified Mortgage. For a $250,000 loan, 3% equals $7,500. While the lender wants to charge 1% ($2,500), the question asks for the maximum allowable, which is $7,500.
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