Skip to main content
  1. Life
  2. Neighborhoods
  3. Real Estate & Construction

Qualified Mortgage Guidelines

See also

Buyers who need to purchase a home with a loan can expect to see significant changes in loan requirements taking effect January 10, 2014.

The new guidelines implemented under The Consumer Financial Protection Bureau's Qualified Mortgage (QM) are designed to help avoid the borrowing catastrophes that was followed by the housing crisis.

The guidelines are what lenders use to prove borrowers' ability to repay a loan.

One of the guidelines’ requirements is that borrowers must have a maximum debt-to-income ratio of 43 percent. The new rules will not allow for any compensating circumstances. Not even a significant down payment or a large cash reserve will be allowed to offset a higher debt ratio.

Self-employed borrowers will face tough standards in 2014. In the QM guidelines, all borrowers must prove there is sufficient cash flow to make payments on their loan. Even when there is a large amount of money in reserve, it may be difficult for the self-employed borrower to get a loan approved due to this new "ability-to-repay" QM guideline.

Origination loan fees are being limited to no more than 3 percent of the loan amount.

If the mortgages don't meet the QM guidelines, the lender will be required to hold the loan as opposed to selling it to Fannie Mae and Freddie Mac.

30 Year Interest Rate Average = 7.92% Source: Freddie Mac



  • Dead babies found
    Seven dead babies were found in Utah resident Megan Huntsman's old home
    Shocking Discovery
  • Kendall Jenner
    Get the Coachella looks: Kendall Jenner’s nose ring, green hair and edgy nails
    Coachella Look
  • Dog's Easter basket
    How to fill your dog’s Easter basket with the perfect toys
    Easter Basket
  • Rabbit owners
    Bringing home the bunny: Important information for rabbit owners
    7 Photos
  • Haunted island
    The world’s most haunted island may soon be the most haunted luxury resort
    Haunted Resort
  • Sunken ferry
    Search continues for missing passengers after a ferry sinks off the South Korean coast
    Sunken Ferry

User login

Log in
Sign in with your email and password. Or reset your password.
Write for us
Interested in becoming an Examiner and sharing your experience and passion? We're always looking for quality writers. Find out more about and apply today!