For refinanced loans to qualify as QMs, what is a primary requirement?

For refinanced loans to qualify as Qualified Mortgages (QMs), a primary requirement is that they must provide a tangible net benefit to the borrower. This means that the refinance must demonstrate a clear advantage to the borrower, which could be in the form of a lower monthly payment, a reduction in the loan term, or even an interest rate that is more favorable than the previous loan. This requirement is in place to protect borrowers, ensuring that they are not entering into new loans that do not offer a significant financial improvement over their existing mortgages.

In the context of the other choices, while some may suggest important considerations in lending, they do not hold the same weight in terms of qualifying as a QM under the refinancing rules. For instance, approval by the CFPB does not directly relate to the refinance's benefit to the borrower. Similarly, minimum credit scores and interest rates, while relevant factors in underwriting, do not address the specific requirement that all refinanced loans must tangibly benefit the borrower for QM designation.