Which statement about the 43% DTI in General QM is accurate?

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Multiple Choice

Which statement about the 43% DTI in General QM is accurate?

In General QM, the key idea is that a borrower’s ability to repay is assessed with a back-end debt-to-income (DTI) limit. The 43% DTI means the total of monthly debt payments a borrower has (including mortgages, auto loans, credit cards, alimony or child support, etc.) must not exceed 43% of their gross monthly income. It’s measured against gross income, not net, and it’s a back-end ratio, not a front-end housing-only ratio. This 43% cap is specific to General QM and helps ensure borrowers have enough income left to cover other obligations while meeting the loan’s requirements. The phrasing that best captures this is that the 43% DTI is the back-end limit used for General QM.

In General QM, the key idea is that a borrower’s ability to repay is assessed with a back-end debt-to-income (DTI) limit. The 43% DTI means the total of monthly debt payments a borrower has (including mortgages, auto loans, credit cards, alimony or child support, etc.) must not exceed 43% of their gross monthly income. It’s measured against gross income, not net, and it’s a back-end ratio, not a front-end housing-only ratio. This 43% cap is specific to General QM and helps ensure borrowers have enough income left to cover other obligations while meeting the loan’s requirements. The phrasing that best captures this is that the 43% DTI is the back-end limit used for General QM.

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