What is considered a "qualified mortgage"?

A "qualified mortgage" is defined as a mortgage that meets specific standards established by the Consumer Financial Protection Bureau (CFPB). These standards are designed to ensure that borrowers can repay their loans based on their financial circumstances.

Qualified mortgages typically feature characteristics such as limits on fees and points, no risky features like negative amortization, and verification of the borrower's income and assets. The classification as a qualified mortgage provides lenders with a degree of protection from liability should the borrower default, as these mortgages are seen as more stable and safer options for both lenders and consumers.

The other options do not accurately capture the definition of a qualified mortgage. Low closing costs alone do not qualify a mortgage as a "qualified mortgage," nor are such mortgages solely limited to those offered by government entities. Similarly, while flexible repayment terms can be beneficial, they do not meet the strict regulatory criteria that define a qualified mortgage.