Finance
A Utah lender who originates a Qualified Mortgage (QM) receives a presumption that they:
AMay charge any interest rate
BComplied with the ability-to-repay rule✓ Correct
CAutomatically approved the loan without verification
DIs exempt from TRID disclosure requirements
Explanation
Qualified Mortgages under Dodd-Frank come with a safe harbor or rebuttable presumption that the lender complied with the ability-to-repay rules, reducing the lender's legal exposure.
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Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
State-Specific Concepts
Disclosure Requirements
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