Child care; and Voluntary deductions 1 A qualified mortgage is a covered transaction: That provides for regular periodic payments that are substantially equal, except for the effect that any interest rate change after consummation has on the payment in the case of an adjustable rate or step rate mortgage that do not: (A) Result in an increase of the principal balance; (B) Allow the consumer to defer repayment of principal, except as provided; or (C)Results in a balloon payment, (ii) For which the loan term does not exceed 30 years; For which the total points and fees payable in connection with the loan do not exceed the amounts specified; For which the creditor underwrites the loan, taking into account the monthly payment for mortgage-related obligations, using: The maximum interest rate that may apply during the first five years after the date on which the first regular periodic payment will be due; and Periodic payments of principal and interest that will either: The outstanding principal balance over the remaining term of the loan as of the date the interest rate adjusts to the maximum interest rate set assuming the consumer will have made all required payments as due prior to that date; or The loan amount over the loan term; For which the creditor considers and verifies at or before consummation the following: The consumer’s current and reasonably expected income or assets other than the value of the dwelling (including any real property attached to the dwelling) that secures the loan; and The consumer’s current debt obligations, alimony, and child support; and For which the ratio of the consumer’s total monthly debt to total monthly income at the time of consummation does not exceed 43%. For the purposes of this paragraph, the total monthly debt to total monthly income is determined: Using the consumer’s monthly payment on: The covered transaction, including the monthly payment for mortgage-related obligations; and Any simultaneous loan that the creditor knows or has reason to know will be made. Qualified Mortgage
Child care; and Voluntary deductions 1 A qualified mortgage is a covered transaction: That provides for regular periodic payments that are substantially equal, except for the effect that any interest rate change after consummation has on the payment in the case of an adjustable rate or step rate mortgage that do not: (A) Result in an increase of the principal balance; (B) Allow the consumer to defer repayment of principal, except as provided; or (C)Results in a balloon payment, (ii) For which the loan term does not exceed 30 years; For which the total points and fees payable in connection with the loan do not exceed the amounts specified; For which the creditor underwrites the loan, taking into account the monthly payment for mortgage-related obligations, using: The maximum interest rate that may apply during the first five years after the date on which the first regular periodic payment will be due; and Periodic payments of principal and interest that will either: The outstanding principal balance over the remaining term of the loan as of the date the interest rate adjusts to the maximum interest rate set assuming the consumer will have made all required payments as due prior to that date; or The loan amount over the loan term; For which the creditor considers and verifies at or before consummation the following: The consumer’s current and reasonably expected income or assets other than the value of the dwelling (including any real property attached to the dwelling) that secures the loan; and The consumer’s current debt obligations, alimony, and child support; and For which the ratio of the consumer’s total monthly debt to total monthly income at the time of consummation does not exceed 43%. For the purposes of this paragraph, the total monthly debt to total monthly income is determined: Using the consumer’s monthly payment on: The covered transaction, including the monthly payment for mortgage-related obligations; and Any simultaneous loan that the creditor knows or has reason to know will be made. Qualified Mortgage