What is the maximum debt-to-income ratio for a Qualified Mortgage under the Ability-to-Repay rule?
Correct Answer
C) 43%
Under the Ability-to-Repay rule (Regulation Z), a Qualified Mortgage generally cannot have a debt-to-income ratio exceeding 43%. This is one of the key QM requirements designed to ensure borrowers have a reasonable ability to repay their mortgage loans.
Why This Is the Correct Answer
Under the Ability-to-Repay rule (Regulation Z), a Qualified Mortgage generally cannot have a debt-to-income ratio exceeding 43%. This is one of the key QM requirements designed to ensure borrowers have a reasonable ability to repay their mortgage loans.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
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?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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