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NMLS PRACTICE TEST HARD QUESTIONS|COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED, VERIFIED ANSWERS |NEWEST 2025.
"If an applicant works 40 hours every week and is paid $13.52 per hour, what is the applicant's monthly income? A.) $2,163. B.) $2,343. C.) $2,379.
D.) $2,487.68 - CORRECT ANSWER B.) $2,343.
$13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343.47 Monthly income" "The requirement for private mortgage insurance is generally is continued when the loan-to- value ratio falls below: A.) 20% B.) 50% C.) 80%
D.) 90% - CORRECT ANSWER C.) 80%"
"Which of the following documents itemizes all settlement costs including lender charges? A.) Agreement of sale B.) HUD-1/closing Disclosure C.) Form 1003
D.) Forbearance agreement - CORRECT ANSWER B.) HUD-1/closing Disclosure"
"Which of the following methods of disclosure does NOT meet the requirements of Equal Credit Opportunity Act (ECOA)? A.) E-mail B.) Mailed letter C.) Telephone
D.) Faxed letter - CORRECT ANSWER C.) Telephone"
"Term "20 basis points" expressed as a percentage is: A.) 0.2% B.) 0.20% C.) 2.00%
D.) 20.00% - CORRECT ANSWER B.) 0.20%
one hundredth of one percent, used chiefly in expressing differences of interest rates. 0. so 0.01 x20 = 0.2" "The late fee for a conventional loan is: A.) 3% of principle and interest B.) 4% of principle and interest C.) 5% of principle and interest
D.) 10% of principle and interest - CORRECT ANSWER C.) 5% of principle and interest"
"A funding fee if required for a: A.) FHA loan B.) VA loan C.) Jumbo loan
D.) Conventional loan - CORRECT ANSWER B.) VA loan"
"A Mortgage Insurance Premium is required on: A.) FHA loan B.) VA loan C.) Jumbo loan
D.) Conventional loan - CORRECT ANSWER A.) FHA loan"
"The mortgagee is the: A.) Borrower B.) Lender C.) Closing agent
D.) Mortgage broker - CORRECT ANSWER B.) Lender"
B.) Funding Fee C.) Hazard Insurance
D.) Interest - CORRECT ANSWER B.) Funding Fee"
"Who does Fannie Mae hold responsible for the quality of an appraisal? A.) Appraiser B.) Borrower C.) Mortgage broker
D.) Lender - CORRECT ANSWER D.) Lender"
"How many days does a lender have to send an adverse action notice? A.) 5 B.) 10 C.) 30
D.) 60 - CORRECT ANSWER C.) 30"
"The GFE/Loan Estimate must be mailed or given to the borrower within how many days after rceiving the signed application? A.) 3 business days B.) 7 business days C.) 10 business days
D.) 30 business days - CORRECT ANSWER A.) 3 business days"
"The enforcement of a lien is known as: A.) Closing B.) Foreclosure C.) Warranty inspection
D.) Police Action - CORRECT ANSWER B.) Foreclosure"
"The minimum percentage of ownership in a related service required a conflict of interest disclosure? A.) 5% B.) 10% C.) 25%
D.) 50% - CORRECT ANSWER B.) 10%"
"What minimum percentage o ownership qualifies an individual as self-employed? A.) 5% B.) 10% C.) 25%
D.) 50% - CORRECT ANSWER C.) 25%"
"A salaried employee may have to produce which of the following documents to obtain a loan? A.) 90 day pay stubs B.) 2 years W2's C.) Profit and Loss statement
D.) Balance sheet - CORRECT ANSWER B.) 2 years W2's"
"How may months must be left on an automobile lease to include it as a debt? A.) 2 months B.) 5 months C.) 10 months
D.) It is always included - CORRECT ANSWER D.) It is always included"
"How long after the application date must social security payments continue to be received in order to count as income? A.) 3 months B.) 10 months C.) 2 years
D.) 3 years - CORRECT ANSWER D.) 3 years"
"Credit reports on new construction are good for how many days? A.) 90 days B.) 120 days C.) 180 days
D.) 225 days - CORRECT ANSWER B.) 120 days"
"Which clause in a mortgage allows a lender to increase the interest rate?
B.) FEMA
C.) FHA
D.) VA - CORRECT ANSWER B.) FEMA"
"A VA appraisal is known as a: A.) CRV B.) Veteran's appraisal report C.) Fannie Mae 1025
D.) AVA - CORRECT ANSWER A.) CRV"
"Private Mortgages Insurance is automatically canceled when the loan-to-value reaches what level? A.) 55% B.) 70% C.) 78%
D.) 80% - CORRECT ANSWER C.) 78%"
"Which types of loans are meant for rural areas? A.) VA B.) FHA C.) USDA
D.) RAL - CORRECT ANSWER C.) USDA"
"The purchase price of a home is $200,000 and the loan amount is $180,000. The borrower pays 6% interest with 1 discount point and 1 origination point. What is the cost of the points? A.) $1, B.) $2, C.) $3,
D.) $4,000 - CORRECT ANSWER C.) $3,
The key to this question is POINTS last time i accidentally added the 6% interest. There is 2 points so $180,000 x .02 = $3,600" "If the Gross Rent Multiplier (GRM) decreases, the property value:
A.) Increases B.) Decreases C.) Does not change
D.) Can increase or decrease - CORRECT ANSWER B.) Decreases"
"What is the maximum allowable amount of VA seller concessions? A.) 2% B.) 3% C.) 4%
D.) 5% - CORRECT ANSWER C.) 4%"
"When a property increases in value for any reason this is known as: A.) Acceleration B.) Appreciation C.) Accumulation
D.) Acclimation - CORRECT ANSWER B.) Appreciation"
"Which of the following is incorrect regarding an adjustable-rate mortgage? A.) The index is fixed B.) The margin is fixed C.) There are rate caps on both the adjustment period and the life of the loan
D.) LIBOR is a typical index used - CORRECT ANSWER A.) The index is fixed"
"Which of the following is NOT a fully amortized loan? A.) Term mortgage B.) Fixed-rate mortgage C.) Adjustable-rate mortgage
D.) Bi-weekly mortgage - CORRECT ANSWER A.) Term mortgage"
"Which of the following is a negatively amortizing loan? A.) Reverse mortgage B.) Balloon mortgage C.) Term mortgage
"Which law is known as Regulation C A.) Real Estate Settlement Procedures Act B.) Truth-in-Lending C.) Equal Credit Opportunity Act
D.) Home Mortgage Disclosure Act - CORRECT ANSWER D.) Home Mortgage Disclosure Act"
"What is the minimum down payment for a USDA loan? A.) $ B.) 3.5% C.) 5%
D.) 10% - CORRECT ANSWER A.) $0"
"How many hours of continuing education are minimally required? A.) 8 hours every year B.) 14 hours every year C.) 14 hours every 2 years
D.) 20 hours every 2 years - CORRECT ANSWER A.) 8 hours every year"
"Who is responsible for completing the HUD-/Loan Disclosure? A.) The borrower B.) The closing agent C.) The loan originator
D.) The grantor - CORRECT ANSWER B.) The closing agent"
"A mortgagor's title insurance policy is: A.) Transferable B.) Required C.) Based on purchase price
D.) Never used - CORRECT ANSWER C.) Based on purchase price"
"The assignee of a mortgage and note is participating the in the: A.) Primary lending market B.) Capital market
C.) Secondary mortgage market
D.) Options market - CORRECT ANSWER C.) Secondary mortgage market"
"VA loans are: A.) Partially guaranteed B.) Insured C.) Exempt
D.) Entitled - CORRECT ANSWER A.) Partially guaranteed"
"The late fee for a VA loan is: A.) 3% of principal and interest B.) 4% of principal and interest C.) 5% of principal and interest
D.) 10% of principal and interest - CORRECT ANSWER B.) 4% of principal and interest"
"What clause in a mortgage allows the lender to call the entire loan balance due? A.) Defeasance B.) Escalation C.) Acceleration
D.) Exculpatory - CORRECT ANSWER C.) Acceleration"
"What clause in a mortgage prevents the lender from recovering additional assets from the mortgagor if there is a shortfall in the foreclosure proceeds A.) Forbearance B.) Escalation C.) Acceleration
D.) Exculpatory - CORRECT ANSWER D.) Exculpatory"
"What term describes the intentional delay of action on the part of the lender upon a borrower's default? A.) Forbearance B.) Escalation C.) Acceleration
D.) Exculpatory - CORRECT ANSWER A.) Forbearance"
A.) Favorable interest rates B.) Low down payment C.) No monthly mortgage insurance
D.) Assumable - CORRECT ANSWER C.) No monthly mortgage insurance"
"A loan closes on May 14. When is the first mortgage payment due? A.) May 15 B.) June 1 C.) June 15
D.) July 1 - CORRECT ANSWER D.) July 1
45 days" "Alimony payments must continue to be received for how long after the application date if they are to be included as income? A.) 10 months B.) 2 years C.) 3 years
D.) 4 years - CORRECT ANSWER C.) 3 years"
"Credit reports are good for how many days after they are pulled for qualifying purposes? A.) 60 B.) 90 C.) 120
D.) 180 - CORRECT ANSWER C.) 120"
"Which of the following is correct for an adjustable-rate mortgage A.) Index - margin = fully indexed rate B.) Margin - Index = fully indexed rate C.) Index + Margin = fully indexed rate
D.) Index - Margin = fully indexed rate - CORRECT ANSWER C.) Index + Margin = fully indexed
rate" "The maximum term for a FHA loan is:
A.) 15 years B.) 30 years C.) 40 years
D.) 50 years - CORRECT ANSWER B.) 30 years"
"Which of the following is NOT an involuntary lien A.) IRA lien B.) Judgment lien C.) Mortgage lien
D.) Mechanic's lien - CORRECT ANSWER C.) Mortgage lien"
"Which type of co-ownership permits the property to pass an heir? A.) Collaboration B.) Tenants in common C.) Joint tenancy
D.) Subordination - CORRECT ANSWER B.) Tenants in common"
"Which law entitles an applicant to a copy of his property appraisal report? A.) Homeowner's Protection Act B.) The Fair and Accurate Credit Transaction Act C.) Truth-in-Lending
D.) The Equal Credit Opportunity Act - CORRECT ANSWER D.) The Equal Credit Opportunity
Act" "Which law is also known as Regulation X A.) Truth in Lending B.) Real Estate Settlement Procedures Act C.) Homeowner's Protection Act
D.) The Equal Credit Opportunity Act - CORRECT ANSWER B.) Real Estate Settlement
Procedures Act" "Which law protects an individual's confidential information? A.) Truth in Lending
B.) $27,
C.) $30,
D.) $25,000 - CORRECT ANSWER D.) $25,
$160,000 x .20 (20%) = 32000 - $7,000 = $25,000" "According to the Truth-in-Lending Act (TILA), the term "refinance" applies to A.) A change in a payment schedule B.) A reduction in annual percentage rate C.) The renewal of a single payment obligation with no change in the original terms
D.) The satisfaction of an existing obligation and its replacement by a new obligation - CORRECT
ANSWER D.) The satisfaction of an existing obligation and its replacement by a new obligation"
"What does a loan originator use to determine the estimated value of a property based on an analytical comparison of similar property sales? A.) An appraisal B.) A market survey C.) An area survey
D.) A Cost-benefit analysis - CORRECT ANSWER A.) An appraisal"
"According to the Truth-in-Lending Act (TILA), which if the following fees is EXCLUDED from the calculation of the annual percentage rate? A.) Hazard insurance B.) Wire transfer C.) Prepaid interest
D.) Mortgage insurance premiums - CORRECT ANSWER A.) Hazard insurance"
"FHA loans are: A.) Partially guaranteed B.) 100% insured C.) Exempt
D.) Entitled - CORRECT ANSWER A.) Partially guaranteed"
"When the mortgagor and the mortgagee title insurance policies are issued at the same time, this is known as: A.) Simultaneous issue
B.) Concurrent issue C.) Subsequent issue
D.) Dual issue - CORRECT ANSWER A.) Simultaneous issue"
"A shrubbery hedge is one example of an: A.) Encumbrance B.) Easement C.) Entitlement
D.) Acceptable title impediment - CORRECT ANSWER D.) Acceptable title impediment"
"A loan on personal property only known as: A.) Package mortgage B.) Chattel mortgage C.) Furnishing mortgage
D.) Exotic mortgage - CORRECT ANSWER B.) Chattel mortgage
Investopedia Chattel mortgage is a legal term used to describe a loan arrangement in which an item of movable personal property is used as security for the loan. The movable property, or chattel, guarantees the loan in this type of mortgage. This differs from a conventional mortgage in which the loan is secured by a lien on real property." "Which law is known as Regulation B? A.) Truth-in-Lending B.) Real Estate Settlement Procedures Act C.) Equal Credit Opportunity Act
D.) Patriot Act - CORRECT ANSWER C.) Equal Credit Opportunity Act"
"Which law prohibits discrimination by lenders? A.) Truth-in-Lending B.) Real Estate Settlement Procedures Act C.) Equal Credit Opportunity Act
D.) Patriot Act - CORRECT ANSWER C.) Equal Credit Opportunity Act"
"A property sold for $200,000 and was appraised at $180,000. The borrower received a loan for $150,000. What is the loan-to-value? A.) 75%
Investopedia The income approach is a real estate appraisal method that allows investors to estimate the value of a property by taking the net operating income of the rent collected and dividing it by the capitalization rate." "The purchase price of a home is $325,000 and the appraisal price is $350,000. If the first mortgage is in the amount of $200,000 and the second mortgage is $60,000. What is the combined loan-to-value ratio? A.) 78.3% B.) 80.0% C.) 86.7%
D.) 92.3% - CORRECT ANSWER B.) 80.0%
"The purchase price of a home is $375,000 and the buyer will assume a $175000 1st mortgage. The loan-to-value cannot exceed 85%. What is the maximum amount of the new 2nd mortgage. A.) $130, B.) $143, C.) $162,
D.) $171,260 - CORRECT ANSWER B.) $143,
$375,000 x .85 (85%) = $318,750 - $175,000 = $143,750" "When title is transferred and the buyer assumes no liability for the note, this type of transference is known as: A.) Free and clear B.) Subject to the mortgage C.) Assumption
D.) Novation - CORRECT ANSWER B.) Subject to the mortgage"
"The most comprehensive form of ownership is: A.) Real Estate Investment Trust B.) Fee simple absolute C.) Tenants in common
D.) Joint tenancy - CORRECT ANSWER B.) Fee simple absolute"
"Which is NOT a component of a valid contract? A.) Agreement B.) Consideration C.) Two witnesses
D.) Competent parties - CORRECT ANSWER C.) Two witnesses"
"The economic concept which states that a knowledgeable buyer will pay no more for one property than they would pay for an equally desirable comparable property is: A.) Principle of Substitution B.) Principle of Highest and Best Use C.) Principle of Market Value
D.) Principle of Intelligent Purchases - CORRECT ANSWER A.) Principle of Substitution"
"Which law allows consumers a free copy of their credit report every year? A.) Homeowner's Protection Act B.) The Fair and Accurate Credit Transaction Act C.) Truth-in-Lending
D.) The Equal Credit Opportunity Act - CORRECT ANSWER B.) The Fair and Accurate Credit
Transaction Act" "Which law required the interviewer to complete the Government Monitoring section on the 1003? A.) Homeowner's Protection Act B.) The Fair and Accurate Credit Transaction Act C.) Truth-in-Lending
D.) The Equal Credit Opportunity Act - CORRECT ANSWER D.) The Equal Credit Opportunity
Act"
