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Financing

Financing Practice Question

The Qualified Mortgage (QM) rule under Dodd-Frank prohibits loans with:
A
Fixed interest rates
B
Negative amortization or interest-only payments
C
Down payments less than 20%
D
Terms longer than 15 years
Explanation

Qualified Mortgages cannot have risky features such as negative amortization, interest-only payments, balloon payments (with some exceptions), loan terms exceeding 30 years, or excessive points and fees. QMs also have debt-to-income ratio limits.

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