Which of the following is true about the assessment of a borrower's income for QM?

The assessment of a borrower's income for Qualified Mortgages (QM) is crucial to determine their ability to repay the loan, and the correct answer emphasizes the importance of evaluating all relevant income sources. Under QM regulations, lenders must consider not only the borrower's current employment income but also other streams of income that may contribute to their overall financial stability. This comprehensive assessment ensures that the borrower can handle their mortgage payments and reduces the risk of default.

This approach aligns with the regulations aimed at protecting both borrowers and lenders by promoting responsible lending practices. By requiring an examination of all relevant income sources, lenders can make more informed and accurate decisions regarding a borrower's financial capability to maintain loan payments over time.

In contrast, certain income types being excluded would limit this assessment and could lead to misrepresentation of the borrower's financial situation. Focusing solely on current employment income would provide an incomplete picture and potentially overlook critical factors that influence repayment ability. Lastly, making income assessment optional would undermine the foundation of the QM guidelines, which are designed to ensure that borrowers are given loans they are likely to repay.