Earlier this month a new rule took effect for Qualified Mortgages. Before we discuss what the new rule includes and why it is important let’s be sure we are on the same page when we say “Qualified Mortgage”.
Qualified Mortgages are a direct result of the risky loans that were common place before the market “crash” of 2008 – essentially qualified mortgages must meet a variety of requirements to ensure loans are being made in the same manner and that borrowers are meeting the same qualifications across the board.
So back to the new rules; many of these rules also protect the consumer from excessive fees when they are obtaining a mortgage.
The rule requires numerous items to be considered in fees and points when determining for purposes of meeting the 3% cap. Many depend on circumstances too numerous to mention here but two changes that really jump out are:
- There will be circumstances when all or part of an appraisal fee will be included
- There will be times when private mortgage insurance (PMI) will be included
Another interesting part of the rule is that the small loan threshold has been increased from $75,000 to $100,000.
Keller Williams Greater Cleveland, Carol Murphy Team