What is the maximum points and fees for a loan of $100,000 or greater on a qualified mortgage?

For a loan amount of $100,000 or greater on a qualified mortgage, the maximum points and fees that can be charged is capped at 3% of the loan amount. This limit is established by the Dodd-Frank Wall Street Reform and Consumer Protection Act to protect borrowers from excessive fees that could make the mortgage unaffordable or lead to predatory lending practices.

In practice, this means that if a borrower takes out a qualified mortgage of exactly $100,000, the maximum allowed for points and fees would be $3,000. This regulation is integral to ensuring transparency and fairness in the lending process, helping consumers understand the costs associated with obtaining a mortgage.

Lending regulations are designed to provide a balance between the lender's ability to cover costs and the borrower's need for affordable lending options. Therefore, the established ceiling of 3% ensures that borrowers can receive competitive and decent lending terms without being burdened by excessive upfront costs.