For an interest only, variable rate mortgage loan, should the balloon payment be calculated on the GFE, TIL, and Note based on the initial payment or the maximum possible payment?

I'm on a roll today, so I'm going to sa maximum possible payment--am I right?

Is anyone sure about this?

(What do I include on the debt side of the debt-to-income ratio when determining ATR?” on page 21 for special rules for calculating payments for interest-only, negative-amortization, and balloon loans.)

Ability To Repay & Qualified Mortgage Rule
Small Entity Compliance Guide


From what I am reading your calculations will be based off of the type of balloon loan it is, such as higher priced or not.

For non-higher-priced balloon loans: Use the maximum payment scheduled during the first five years after the first regular periodic payment comes due.

For interest-only loans: Use the greater of the fully-indexed or introductory rate and equal, monthly payments of principal and interest that will repay the outstanding loan amount on the date the loan recasts over the remaining term of the loan.


Page 23 Ability to Repay & Qualified Mortgage Rule

I hope this helps..