What percentage of the total loan amount can points and fees not exceed for a qualified mortgage over $100,000?

For a qualified mortgage with a total loan amount exceeding $100,000, points and fees are capped at 3% of the total loan amount. This regulation is designed to protect consumers from excessive costs associated with obtaining a mortgage.

The 3% limit includes various types of fees, such as origination fees, points, and other closing costs that are charged by the lender. These restrictions ensure that borrowers are not burdened with high upfront costs that could make it difficult for them to finance their homes.

Understanding this cap is critical, as it helps maintain the affordability of loans and ensures a fair borrowing environment. For example, if someone is taking out a loan of $150,000, then their total points and fees should not exceed $4,500 (which is 3% of $150,000).