What is a key feature of a Qualified Mortgage?

A key feature of a Qualified Mortgage (QM) is the cap on fees and points, which is designed to ensure that borrowing remains affordable and protects consumers from excessive costs associated with obtaining a mortgage. This requirement establishes limits on the total points and fees that a lender can charge, which helps prevent predatory lending practices and ensures that more consumers can access fair mortgage products.

Qualified Mortgages are also required to meet other standards, such as verifying the borrower’s ability to repay the loan, so the focus on capping fees and points is a significant consumer protection feature that contributes to the overall stability and integrity of the mortgage market.

While other aspects like credit score requirements, down payment amounts, and loan limitations are important in determining the overall lending landscape, the cap on fees and points is specifically integral to the definition of a Qualified Mortgage, which aims to create a healthier lending environment for consumers.