Wondering what mortgage companies are looking at when you apply for a loan? It can seem like a mysterious process where you turn in a lot of paperwork and then wait. Here’s a great summary of where the industry seems to be headed with the Dodd-Frank Qualified Mortgage (QM), from RIS Media:
“…a mortgage that meets the following requirements:
(1) It does not include negative amortization, interest-only payments, balloon payments, or have a loan term exceeding 30 years.
(2) The total points and fees do not exceed 3 percent of the total loan amount.
(3) The income or assets of the borrower have been considered and verified.
(4) With regard to underwriting:
a. It is based on the maximum interest rate in the first five years.
b. It uses a payment schedule that fully amortizes the loan over the loan term.
c. It takes into account any mortgage-related obligations.”
That’s all pretty common sense that there should be a limit on the length of the loan and everything is verified. Click here for the rest of the article – there’s more good stuff to be aware of!
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