What is the maximum origination fee that can be charged on a qualified mortgage under the points and fees test?
Correct Answer
B) 3% of the loan amount for loans $100,000 and above
Under the QM points and fees test (12 CFR 1026.43(e)(3)), points and fees cannot exceed 3% of the loan amount for loans of $100,000 or more. This includes origination fees and certain other charges.
Why This Is the Correct Answer
Under the QM points and fees test (12 CFR 1026.43(e)(3)), points and fees cannot exceed 3% of the loan amount for loans of $100,000 or more. This includes origination fees and certain other charges.
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?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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