Review 1026.43. It has to do with the ATR.
2. First five years after the date on which the first regular periodic payment will be due. Under ยง 1026.43(c)(5)(ii)(A)(1), the creditor must determine a consumer's ability to repay a loan with a balloon payment that is not a higher-priced covered transaction using the maximum payment scheduled during the first five years (60 months) after the date on which the first regular periodic payment will be due. To illustrate:
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.