A QM (Qualified Mortgage) is a standard mortgage program that meets U.S. government lending guidelines. Because QM loans are generally considered lower risk, they typically offer lower interest rates than Non-QM mortgage programs.

During the mortgage approval process, lenders evaluate the following:

✅ Employment & Income

• Minimum two-year employment history
• W-2 employees
• Self-employed borrowers
• Retirement income
• Pension and investment income

✅ Debt-to-Income Ratio (DTI)

• Generally recommended at 45% or below
• Depending on the program, DTI may be allowed up to approximately 50%

✅ Credit Score

• Typically 620 or higher
• 740+ may qualify for better loan terms
• 760+ may qualify for the most competitive interest rates

✅ Assets
Lenders verify that borrowers have sufficient funds for the down payment, closing costs, and required cash reserves.

Common asset documentation includes:

• Most recent 2 months of bank statements
• Large deposits may require documentation of the source of funds
• Checking Accounts
• Savings Accounts
• Certificates of Deposit (CDs)
• Stocks & Bonds
• 401(k) Accounts
• IRA Accounts
• Mutual Funds
• Gift Funds (when permitted by the loan program)