I may sound like I am beating a horse at this point…for the 2nd time, but again interest rates are on absolute fire at a 50-year low. No matter what your goals are, how many homes you have…now is the time to strike while the iron is hot. Make sure to take advantage and pick up those additional properties. Go refinance your current long term holds and increase your cash flow. Pull out the cash to purchase additional properties. Do not let the time pass when money is this affordable is what I am trying to say.

2021 Annual Thresholds for Hoepa and QM Loans

The Consumer Financial Protection Bureau (CFPB) announced that changes to HOEPA and QM Points and Fee Thresholds would be coming for 2021. Regulation Z which implements both statutes provide that this threshold amount be recalculated annually using the Consumer Price Index (CPI) in effect on the preceding June 1. The HOEPA points-and-fees coverage test assesses whether a transaction is a high-cost mortgage due to points and fees the creditor is charging, the applicable points-and-fees coverage test depends on whether the total loan amount is for $20,000 or more, or for less than $20,000.

Effective January 1, 2021, for purposes of determining the points-and-fees coverage test under HOEPA to which a transaction is subject, the total loan amount threshold is $22,052, and the adjusted points-and-fees dollar trigger is $1,103. If the total loan amount for a transaction is $22,052 or more, and the points-and-fees amount exceeds 5 percent of the total loan amount, the transaction is a high-cost mortgage. If the total loan amount for a transaction is less than $22,052, and the points-and-fees amount exceeds the lesser of the adjusted points-and-fees dollar trigger of $1,103 or 8 percent of the total loan amount, the transaction is a high-cost mortgage.

A covered transaction is not a qualified mortgage if the transaction’s total points and fees exceed: 3 percent of the total loan amount for a loan amount greater than or equal to $100,000; $3,000 for a loan amount greater than or equal to $60,000 but less than $100,000; 5 percent of the total loan amount for loans greater than or equal to $20,000 but less than $60,000; $1,000 for a loan amount greater than or equal to $12,500 but less than $20,000; or 8 percent of the total loan amount for loans less than $12,500.

Effective January 1, 2021, a covered transaction is not a qualified mortgage if the transaction’s total points and fees exceed 3 percent of the total loan amount for a loan amount greater than or equal to $110,260; $3,308 for a loan amount greater than or equal to $66,156 but less than $110,260; 5 percent of the total loan amount for loans greater than or equal to $22,052 but less than $66,156; $1,103 for a loan amount greater than or equal to $13,783 but less than $22,052; or 8 percent of the total loan amount for loans less than $13,783.

 Let me know if you have any questions or would like any estimates! Stay healthy!

by Andrew Augustyniak, Peoples Mortgage, Branch Manager/Loan Officer