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#2252662 - 04/20/21 02:13 PM New QM rules and ARMs
Amy Offline
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Joined: Sep 2017
Posts: 13
We have a 5/5 ARM product where the rate is fixed for the first 60 months and adjusts every 60 months thereafter. I am questioning if we need to qualify the borrower on the higher rate since the first rate change is actually month 61 of repayment. Is that correct?

from the rule: However, the General QM Final Rule creates a special rule for General QM loans for which the interest rate may or will change within the first five years after the date on which the first regular periodic payment will be due. For such loans, the creditor must determine the APR, for purposes of this threshold, by treating the maximum interest rate that may apply during that five-year period as the interest rate for the full term of the loan.

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Ability to Repay/Qualified Mortgage Rule
#2252669 - 04/20/21 03:48 PM Re: New QM rules and ARMs Amy
rlcarey Online
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Joined: Jul 2001
Posts: 76,988
Galveston, TX
For an HPCT and rebuttable presumption - yes.

There was no change to the ATR rules as far as the monthly payment you would consider..
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