Finance
Under the Dodd-Frank Ability-to-Repay (ATR) rule, a lender must verify a borrower's ability to repay. A 'Qualified Mortgage' (QM) generally has a maximum debt-to-income ratio of:
A28%
B36%
C43%✓ Correct
D50%
Explanation
A Qualified Mortgage under the ATR rule generally requires a debt-to-income (DTI) ratio of 43% or less. QMs also prohibit negative amortization, interest-only payments, balloon payments (with some exceptions), and excessive upfront fees.
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