Government
Qualified Mortgage (QM)
A category of mortgage defined by the Consumer Financial Protection Bureau (CFPB) that meets specific requirements designed to ensure borrowers can reasonably afford the loan. Qualified mortgages prohibit risky features like interest-only periods, balloon payments, and loan terms longer than 30 years. They also cap fees at 3% of the loan amount. Most mortgages issued today are qualified mortgages, which offer legal protections to both borrowers and lenders.
Why It Matters
Qualified Mortgage (QM) exists because of federal programs and regulations designed to make homeownership more accessible and transparent. Understanding these programs can open doors to loan options, lower costs, or protections you might not know about.
If you think you might qualify for benefits related to qualified mortgage (qm), talk to your lender early. Government-backed programs often have specific eligibility requirements, and knowing them upfront helps you plan your home search.