Which of the following is NOT a category of Qualified Mortgages?

Which of the following is NOT a category of Qualified Mortgages?

• A. Permanent
• B. General
• C. Temporary
• D. Balloon

Answer: (A)

The correct response to the question identifies that "Permanent" is not a recognized category of Qualified Mortgages (QMs). Qualified Mortgages are designed to ensure that borrowers can afford their loan payments and typically adhere to certain guidelines established by regulations. The categories of Qualified Mortgages generally include General, Temporary, and Balloon mortgages, with each serving specific market needs or borrower situations. General Qualified Mortgages encompass traditional loans that meet the established criteria, while Temporary Qualified Mortgages may refer to loans with specific terms meant for short-term scenarios, such as construction financing. Balloon Qualified Mortgages involve payments that do not fully pay off the loan during the loan term, leading to a larger final payment. "Permanent," however, does not accurately fit within these definitions and guidelines used for categorizing Qualified Mortgages. Therefore, identifying "Permanent" as not being a category of Qualified Mortgages reflects an understanding of the structure and purpose of these loans.

The correct response to the question identifies that "Permanent" is not a recognized category of Qualified Mortgages (QMs). Qualified Mortgages are designed to ensure that borrowers can afford their loan payments and typically adhere to certain guidelines established by regulations.

The categories of Qualified Mortgages generally include General, Temporary, and Balloon mortgages, with each serving specific market needs or borrower situations. General Qualified Mortgages encompass traditional loans that meet the established criteria, while Temporary Qualified Mortgages may refer to loans with specific terms meant for short-term scenarios, such as construction financing. Balloon Qualified Mortgages involve payments that do not fully pay off the loan during the loan term, leading to a larger final payment.

"Permanent," however, does not accurately fit within these definitions and guidelines used for categorizing Qualified Mortgages. Therefore, identifying "Permanent" as not being a category of Qualified Mortgages reflects an understanding of the structure and purpose of these loans.