Qm Points And Fees Calculator

Points and Fees Formula:

\[ \text{Points and Fees} = \text{Upfront} + \text{Originator Comp} + \text{PMI (if >1%)} \leq \text{Cap (3% for >100k)} \]

Upfront (USD):

Originator Comp (USD):

PMI (USD):

Loan Amount (USD):

Points and Fees (USD):

Cap (USD):

QM Compliant:

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1. What is the QM Points And Fees Calculation?

The Qualified Mortgage (QM) Points and Fees calculation determines whether a loan meets the Ability-to-Repay/Qualified Mortgage rule's points and fees limit. It includes upfront points and fees, originator compensation, and certain mortgage insurance premiums.

2. How Does the Calculator Work?

The calculator uses the following formula:

\[ \text{Points and Fees} = \text{Upfront} + \text{Originator Comp} + \text{PMI (if >1%)} \leq \text{Cap (3% for >100k)} \]

Where:

$ Upfront $ — Upfront points and fees in dollars
$ Originator Comp $ — Loan originator compensation in dollars
$ PMI $ — Private mortgage insurance (included if >1% of loan amount)
$ Cap $ — 3% of loan amount for loans >$100k

Explanation: The calculation determines if the total points and fees exceed regulatory limits for qualified mortgages.

3. Importance of Points and Fees Calculation

Details: Proper calculation ensures compliance with Consumer Financial Protection Bureau (CFPB) regulations and helps determine if a loan qualifies for QM status, which provides certain legal protections.

4. Using the Calculator

Tips: Enter all dollar amounts in USD. The loan amount determines the applicable cap (3% for loans >$100,000). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What exactly counts as "points and fees"?
A: Includes origination charges, discount points, lender credits, mortgage insurance premiums (if >1%), and certain other fees.

Q2: What's the difference between QM and non-QM loans?
A: QM loans meet specific criteria that provide lenders with certain legal protections, including points and fees limits.

Q3: Are there different caps for different loan amounts?
A: Yes, generally 3% for loans ≥$100k, $3,000 for loans ≥$60k and <$100k, and 5% for loans <$60k (simplified).

Q4: What happens if a loan exceeds the points and fees cap?
A: The loan may not qualify for QM status, which affects the lender's legal protections.

Q5: Are there exceptions to these rules?
A: Yes, certain loan types (like temporary balloon payments) have different requirements, and small creditors have some flexibility.