QM Rules (Qualified Mortgage Rules)

Qualified Mortgage (QM) Rules are regulations that lenders follow to ensure they offer loans that borrowers can reasonably repay. These rules set standards like limiting risky loan features (e.g., no excessive upfront fees or adjustable rates that can escalate quickly) and requiring income and debt verification. The goal is to promote responsible lending, reduce defaults, and protect consumers from loans they might struggle to pay back. Essentially, QM rules create a safer lending environment by guiding lenders to assess borrowers’ ability to repay and to avoid overly complicated or risky mortgage products.