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#2122882 - 03/21/17 05:49 PM ARMS AND ATR
newyork Offline
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In order to comply with the minimum underwriting criteria for a small creditor portfolio QM, for the monthly mortgage payment of the loan, what rate do we use for calculation if the loan is an ARMS loan with an introductory rate of 6% and a ceiling of 16%? the product is a 3/1 loan.

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Ability to Repay/Qualified Mortgage Rule
#2122893 - 03/21/17 06:31 PM Re: ARMS AND ATR newyork
rlcarey Online
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rlcarey
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Posts: 83,227
Galveston, TX
What is the index and margin?
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#2122918 - 03/21/17 07:06 PM Re: ARMS AND ATR newyork
newyork Offline
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Posts: 447
WSJ prime rate plus 2.00%

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#2122931 - 03/21/17 07:27 PM Re: ARMS AND ATR newyork
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX

(5) Payment calculation. (i) General rule. Except as provided in paragraph (c)(5)(ii) of this section, a creditor must make the consideration required under paragraph (c)(2)(iii) of this section using:

(A) The fully indexed rate or any introductory interest rate, whichever is greater; and

(B) Monthly, fully amortizing payments that are substantially equal.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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