Coming Changes for Qualified Mortgages

images Coming Changes for Qualified Mortgages

Starting January 10, 2014, HUD will be putting some changes into effect.  Following is an overview, but for more in depth details, the HUD Website has it all.

What is a General QM Mortgage?

  • Monthly back end rate (debt to income) ratio does not exceed 43%
  • Verified income, assets, credit history, and financial information
  • Full documentation only, no stated income allowed
  • Underwritten using Federally prescribed underwriting guidelines
  • ARMs qualified at the maximum interest rate in first five years
  • Points and fees may not exceed the limits based upon the loan amount. *See the points and fees section below*

What is a temporary QM Mortgage?

  • Loan must be eligible for purchase or gaurantee by FHA, VA, USDA, FNMA, and FHMLC
  • Must have an approved AUS agency finding or meet agency quidelines
  • Full documentation only, no stated income allowed
  • Underwritten using Federally prescribed underwriting guidelines
  • ARMs qualified at the maximum interest rate in first five years
  • Points and fees may not exceed the limits based upon the loan amount. *See the points and fees section below*

images (1) Loan Requirements

–No negative amortization
–No interest only loans
–No Balloon mortgages
–Term may not exceed 30 years

Loans Subject to the Rule?

  • All 1-4 unit dwellings including financing of existing Manufactured Homes, regardless of occupancy.

Loans Excluded from the Rule?

  • Reverse Mortgages
  • Bridge Loans
  • Heloc’s
  • Initial Construction Loans
  • New Manufactured Home Financing
  • Housing Finance Agency Loans (Federal or State Bond programs)

All Loans have a Points & Fee Threshold

If the note amount is:
–$100,000 or more –    Limit is 3% of Total Loan Amount
–$60,000 – $99,000 –    Limit is $3,000
–$59,999 – $59,000 –    Limit is 5% of Total Loan Amount

*Borrowers will be required to sign a “Discount Point Fee Disclosure” when signing the final documents explaining the points.

For more information on these changes, or any questions about Home Loans in general, contact:

Blair Chapman
Loan Officer
9250 Laguna Springs Drive 101
Elk Grove, CA 95758
Office:  (916) 683-7363
Fax:  (916) 691-5307
Email:  bchapman@summitfunding.net
Website:  www.summitfunding.net/bchapman

 

 

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