NMLS Exam Questions and Answers |Fall 2025/2026 Update |
100% Correct
Question 1
The preferred debt-to-income ratio for applicants for VA loans is:
A. 35%
B. 43%
C. 50%
D. 41%
Correct Answer
D. 41%
Question 2
When would a license be suspended without a hearing?
A. If a licensee fails to renew
B. If a licensee fails to request a hearing with the state regulator
C. If a licensee has failed to complete pre-licensing requirements
D. If a licensee has already executed a right to a hearing for a previous violation
Correct Answer
B. If a licensee fails to request a hearing with the state regulator
Page 1 of 52
,Question 3
After a borrower allows the assumption of his or her VA loan, he or she may use his or her VA privilege again only after:
A. Five years have passed
B. The home is sold to a new owner
C. The original VA loan is satisfied
D. The original VA loan is moved from his or her name into the name of the assuming borrower
Correct Answer
C. The original VA loan is satisfied
Question 4
In order to qualify for an adjustable-rate mortgage, a consumer must be able to show that he or she can:
A. Make regularly scheduled payments that are calculated using the loan's introductory rate
B. Make amortizing payments that are calculated using the fully indexed rate for the ARM
C. Make amortizing payments that are calculated using the loan's rate after the first interest rate adjustment occurs
D. Make regularly scheduled payments that are calculated using the fixed interest rate for which the consumer would be
eligible
Correct Answer
B. Make amortizing payments that are calculated using the fully indexed rate for the ARM
Page 2 of 52
,Question 5
Money paid by a buyer to a seller at the time of entering into a contract to indicate intent and ability to carry out the
contract is called:
A. Down payment
B. Earnest money
C. Escrow funds
D. Service release premium
Correct Answer
B. Earnest money
Question 6
The Pois have just closed on their mortgage loan at a formal settlement meeting. What is mortgage loan originator Leilani
Luau's responsibility after loan closing?
A. She must provide any required re-disclosures
B. None; Leilani's tasks are complete
C. She must provide another set of disclosures, showing final costs and expenses
D. She must record the transaction with the county recorder
Correct Answer
B. None; Leilani's tasks are complete
Page 3 of 52
, Question 7
In order for a small creditor to originate a balloon payment qualified mortgage, the small creditor must hold the loan in its
portfolio for:
A. Twelve months
B. Three years
C. Two years
D. Five years
Correct Answer
B. Three years
Question 8
When a seller provides all or part of the financing for the borrower in order to finance a purchase transaction, it is known
as:
A. For sale by owner (FSBO)
B. Seller carry-back
C. Seller concessions
D. Seller self-financed
Correct Answer
B. Seller carry-back
Page 4 of 52
100% Correct
Question 1
The preferred debt-to-income ratio for applicants for VA loans is:
A. 35%
B. 43%
C. 50%
D. 41%
Correct Answer
D. 41%
Question 2
When would a license be suspended without a hearing?
A. If a licensee fails to renew
B. If a licensee fails to request a hearing with the state regulator
C. If a licensee has failed to complete pre-licensing requirements
D. If a licensee has already executed a right to a hearing for a previous violation
Correct Answer
B. If a licensee fails to request a hearing with the state regulator
Page 1 of 52
,Question 3
After a borrower allows the assumption of his or her VA loan, he or she may use his or her VA privilege again only after:
A. Five years have passed
B. The home is sold to a new owner
C. The original VA loan is satisfied
D. The original VA loan is moved from his or her name into the name of the assuming borrower
Correct Answer
C. The original VA loan is satisfied
Question 4
In order to qualify for an adjustable-rate mortgage, a consumer must be able to show that he or she can:
A. Make regularly scheduled payments that are calculated using the loan's introductory rate
B. Make amortizing payments that are calculated using the fully indexed rate for the ARM
C. Make amortizing payments that are calculated using the loan's rate after the first interest rate adjustment occurs
D. Make regularly scheduled payments that are calculated using the fixed interest rate for which the consumer would be
eligible
Correct Answer
B. Make amortizing payments that are calculated using the fully indexed rate for the ARM
Page 2 of 52
,Question 5
Money paid by a buyer to a seller at the time of entering into a contract to indicate intent and ability to carry out the
contract is called:
A. Down payment
B. Earnest money
C. Escrow funds
D. Service release premium
Correct Answer
B. Earnest money
Question 6
The Pois have just closed on their mortgage loan at a formal settlement meeting. What is mortgage loan originator Leilani
Luau's responsibility after loan closing?
A. She must provide any required re-disclosures
B. None; Leilani's tasks are complete
C. She must provide another set of disclosures, showing final costs and expenses
D. She must record the transaction with the county recorder
Correct Answer
B. None; Leilani's tasks are complete
Page 3 of 52
, Question 7
In order for a small creditor to originate a balloon payment qualified mortgage, the small creditor must hold the loan in its
portfolio for:
A. Twelve months
B. Three years
C. Two years
D. Five years
Correct Answer
B. Three years
Question 8
When a seller provides all or part of the financing for the borrower in order to finance a purchase transaction, it is known
as:
A. For sale by owner (FSBO)
B. Seller carry-back
C. Seller concessions
D. Seller self-financed
Correct Answer
B. Seller carry-back
Page 4 of 52
