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#1898640 - 02/20/14 08:07 PM Non-QM ARM - Payment Calculation
Mel in WA Offline
Diamond Poster
Joined: Mar 2013
Posts: 1,185
We offer a 3/1 ARM loan that will be placed in portfolio as a non-QM. We are confused as to what rate should be used to calculate the qualifying payment in order to meet ATR. Here's the scenario:

Introductory Rate: 5.0%
Index: .120%
Margin: 4.25%

To comply with ATR, we need to use the fully indexed rate (4.37%) or introductory interest rate (5.0%), whichever is greater. In this case, we should use 5.0%. Is that correct?

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Ability to Repay/Qualified Mortgage Rule
#1898705 - 02/20/14 10:25 PM Re: Non-QM ARM - Payment Calculation Mel in WA
dblack Offline
Gold Star
Joined: Feb 2008
Posts: 263
AL
I believe you have it right.
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CRCM



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