The Qualified Mortgage Scorecard determines if a mortgage is a Qualified Mortgage according to a set of government guidelines. The QM guidelines focus on the borrower's ability to pay back the mortgage and key features of the loan. We provide a detailed discussion of the Qualified Mortgage guidelines. In the Qualified Mortgage Scorecard example document below we show a loan that complies with the QM guidelines as the borrower spends 38.5% of his or her monthly gross income on total monthly housing expense plus other monthly debt, which is less than the 43.0% maximum debt-to-income ratio permitted according to the QM rules.
The example also shows that the mortgage has no negative amortization, interest only period or balloon payment, a loan term of no more than 30 years and lender fees below a specified limit, all of which satisfy QM guidelines. Please note that this is an example Qualified Mortgage Scorecard that should be used for informational purposes only.
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