QM FOR MAC FULL
Mortgages with "balloon" payments, which require the full repayment of the loan after just a few years' time. These payment structures were offered as a component on so-called " Option ARMs". Deferred interest is added back onto the loan amount, causing your loan's principal to increase over time, even though you are making payments. "Negative amortization", a process where you aren't making a large enough required payment to cover all of the interest due on the loan. These are still available in the market to some borrowers but they don't qualify as a QM. Interest-only payment plans were mostly applied to hybrid ARMs, but were also found on some fixed-rate mortgages for a time, too.
The Qualified Mortgage definition bans loans with:Īn "interest-only" payment period, when you pay only the interest without paying down the principal, which is the amount of money you borrowed. In general, qualified mortgages don't allow for certain "risky" features or loan terms and are thought to be more stable and "safe" for borrowers. To be considered a QM, the loan being offered also needs to meet certain standards. OK, you're passed the ATR standard and can be offered a Qualified Mortgage. If you're wondering why lenders have been sticklers for documentation regarding your income and credit, ATR is the reason. If a lender fails to comply with ATR and the borrower can prove this in court, the lender could be liable for up to 3 years of the loan's interest costs, any charges and fees the borrower paid and the borrower's legal fees.