My lender says it can’t lend to me because of a limit on points and fees on loans. Is this true?

The mortgage rules only stop a lender from making a loan when the borrower does not have the ability to repay the loan. However, some lenders may choose to comply with the ability-to-repay rule by making only “Qualified Mortgages,” which do have caps on upfront points and fees.

To make sure borrowers don’t pay very high fees, a lender making a Qualified Mortgage can only charge up to the following upfront points and fees:

• For a loan of $100,000 or more: 3% of the total loan amount or less.
• For a loan of $60,000 to $100,000: $3,000 or less.
• For a loan of $20,000 to $60,000: 5% of the total loan amount or less.
• For a loan of $12,500 to $20,000: $1,000 or less.
• For a loan of $12,500 or less: 8% of the total loan amount or less.

Under the CFPB’s rules, only Qualified Mortgages have a limit on points and fees. Lenders are not required to make Qualified Mortgages, so they can charge higher points and fees if they choose.