A lender originates a mortgage with a 43% debt-to-income ratio using appendix Q standards, but the loan has a 5-year interest-only period followed by a 25-year amortization schedule. What is the status of this loan under QM rules?
Correct Answer
B) It does not qualify as QM due to the interest-only feature
Under 12 CFR 1026.43(e)(2)(v), a qualified mortgage cannot provide for interest-only payments. Even if the DTI meets the 43% threshold, the interest-only feature disqualifies the loan from QM status regardless of other factors.
Why This Is the Correct Answer
Under 12 CFR 1026.43(e)(2)(v), a qualified mortgage cannot provide for interest-only payments. Even if the DTI meets the 43% threshold, the interest-only feature disqualifies the loan from QM status regardless of other factors.
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