What is the cap on points and fees for a QM?

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Multiple Choice

What is the cap on points and fees for a QM?

The limit is about keeping upfront loan costs reasonable so the loan remains affordable and predictable. In a Qualified Mortgage, the total points and fees charged at or before closing must not exceed 3% of the total loan amount. This means the borrower can’t be hit with excessive upfront charges just to obtain the loan. Points and fees include origination charges and certain other lender- or broker-related fees tied to obtaining the loan. Because it’s a percentage of the loan amount, the dollar threshold scales with loan size—for example, a $300,000 loan could have up to $9,000 in points and fees, while a $100,000 loan could have up to $3,000. This cap helps ensure the loan meets safe and sound standards by limiting upfront costs that could affect the borrower’s ability to repay.

The limit is about keeping upfront loan costs reasonable so the loan remains affordable and predictable. In a Qualified Mortgage, the total points and fees charged at or before closing must not exceed 3% of the total loan amount. This means the borrower can’t be hit with excessive upfront charges just to obtain the loan.

Points and fees include origination charges and certain other lender- or broker-related fees tied to obtaining the loan. Because it’s a percentage of the loan amount, the dollar threshold scales with loan size—for example, a $300,000 loan could have up to $9,000 in points and fees, while a $100,000 loan could have up to $3,000.

This cap helps ensure the loan meets safe and sound standards by limiting upfront costs that could affect the borrower’s ability to repay.

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