NMLS EXAM QUESTIONS COMPLETE
WITH 100% VERIFIED ANSWERS
\.Where credit institutions originate loans - ANSWERS-Primary Mortgage Market
\.When an ARM has rate caps of 5/2/6, the 6 refers to what?
A. The maximum rate increase at the initial adjustment
B. The start rate for the loan
C. The maximum the rate can increase over the life of the loan
D. The rate maximum the rate can decrease over the life of the loan - ANSWERS-C.
The maximum the rate can increase over the life of the loan
\.When utilizing a temporary buydown to lower the interest rate on a FHA loan,
which of the following are correct
A. The borrower qualified at the note rate
B. The borrower qualified at the buydown rate
C. The rate cannot be more than 2% below the note rate
D. Seller or builder can pay the discount points to buydown the rate - ANSWERS-B.
The borrower qualified at the buydown rate
\.All of the following are violations of the Fair Housing Act EXCEPT
A. Age
,B. National Origin
C. Disability
D.Religion - ANSWERS-A. Age
\.Claim against property held by one who is not the legal owner - ANSWERS-
Encrumbrance
\.Advertised term that requires additional disclosures - ANSWERS-Trigger Term
\.An advertisement must be presented "clearly and conspicuously" to keep from
being deceptive, unfair, or otherwise violate a Commission rule - ANSWERS-
Advertising Disclosure
\.Extenuating circumstances such as "bona fide personal financial emergency -
ANSWERS-Waving Right of Rescission
\.Right that borrowers have to cancel a loan or line of credit with a lender within
three days of closing - ANSWERS-Right of Rescission
\.When creditors office is open to the public, a calendar working day except
Sunday or a federal holiday - ANSWERS-Business Day
\.Financial information used for purposes of obtaining an extension of credit -
ANSWERS-Application
,\.The act of making new information known - ANSWERS-Disclosure
\.Mission is to promote consumer protection and eliminate and prevent
anticompetitive business practices - ANSWERS-FTC
Federal Trade Commission
\.Regulatory agency charged with overseeing financial products and services
offered to consumers - ANSWERS-CFPB
Consumer Financial Protection Bureau
\.Enacted 1968 promotes the informed use of consumer credit by requiring
disclosures about terms and costs and standardizes the manner in which costs
with borrowing are calculated and disclosed - ANSWERS-TILA
Truth in Lending Act
\.Interest charged on a loan for one or more days - ANSWERS-Per Diem Interest
\.Principal (X) Interest Rate = Annual Interest Rate - ANSWERS-Annual Interest
Rate Formula
\.Mortgage where the mortgagor is only required to pay off the interest that
arises from the principal that is borrowed for a set period - ANSWERS-Interest
Only Mortgage
\.Borrower chooses to pay additional "discount points" to buy down the interest
rate for the life of the mortgage note - ANSWERS-Permanent Buydown
, \.Used on fixed rate loans over two years
Set of two initial temporary-start interest rates that increase in stair-step fashion
until a permanent interest rate is reached - ANSWERS-2/1 Buydown
\.A form of pre-paid interest which effectively increases the yield on the loan
above the amount of the stated interest rate - ANSWERS-Discount Point
\.An amount in addition to the Loan to Value, which simply represents the first
position mortgage or loan as a percentage of the property's value - ANSWERS-
CLTV
Combined Loan to Value
\.Ratio of a loan to the value of an asset purchased - ANSWERS-LTV
Loan to Value
\.Principal, Interest, Taxes, Insurance
Refers to the components of a mortgage payment - ANSWERS-PITI
\.Housing to Debt
Ratio that measures an individual's ability to manage monthly payment and repay
debts - ANSWERS-DIF
\.Agreement between the lender and the borrower to delay foreclosure -
ANSWERS-Forbearance
WITH 100% VERIFIED ANSWERS
\.Where credit institutions originate loans - ANSWERS-Primary Mortgage Market
\.When an ARM has rate caps of 5/2/6, the 6 refers to what?
A. The maximum rate increase at the initial adjustment
B. The start rate for the loan
C. The maximum the rate can increase over the life of the loan
D. The rate maximum the rate can decrease over the life of the loan - ANSWERS-C.
The maximum the rate can increase over the life of the loan
\.When utilizing a temporary buydown to lower the interest rate on a FHA loan,
which of the following are correct
A. The borrower qualified at the note rate
B. The borrower qualified at the buydown rate
C. The rate cannot be more than 2% below the note rate
D. Seller or builder can pay the discount points to buydown the rate - ANSWERS-B.
The borrower qualified at the buydown rate
\.All of the following are violations of the Fair Housing Act EXCEPT
A. Age
,B. National Origin
C. Disability
D.Religion - ANSWERS-A. Age
\.Claim against property held by one who is not the legal owner - ANSWERS-
Encrumbrance
\.Advertised term that requires additional disclosures - ANSWERS-Trigger Term
\.An advertisement must be presented "clearly and conspicuously" to keep from
being deceptive, unfair, or otherwise violate a Commission rule - ANSWERS-
Advertising Disclosure
\.Extenuating circumstances such as "bona fide personal financial emergency -
ANSWERS-Waving Right of Rescission
\.Right that borrowers have to cancel a loan or line of credit with a lender within
three days of closing - ANSWERS-Right of Rescission
\.When creditors office is open to the public, a calendar working day except
Sunday or a federal holiday - ANSWERS-Business Day
\.Financial information used for purposes of obtaining an extension of credit -
ANSWERS-Application
,\.The act of making new information known - ANSWERS-Disclosure
\.Mission is to promote consumer protection and eliminate and prevent
anticompetitive business practices - ANSWERS-FTC
Federal Trade Commission
\.Regulatory agency charged with overseeing financial products and services
offered to consumers - ANSWERS-CFPB
Consumer Financial Protection Bureau
\.Enacted 1968 promotes the informed use of consumer credit by requiring
disclosures about terms and costs and standardizes the manner in which costs
with borrowing are calculated and disclosed - ANSWERS-TILA
Truth in Lending Act
\.Interest charged on a loan for one or more days - ANSWERS-Per Diem Interest
\.Principal (X) Interest Rate = Annual Interest Rate - ANSWERS-Annual Interest
Rate Formula
\.Mortgage where the mortgagor is only required to pay off the interest that
arises from the principal that is borrowed for a set period - ANSWERS-Interest
Only Mortgage
\.Borrower chooses to pay additional "discount points" to buy down the interest
rate for the life of the mortgage note - ANSWERS-Permanent Buydown
, \.Used on fixed rate loans over two years
Set of two initial temporary-start interest rates that increase in stair-step fashion
until a permanent interest rate is reached - ANSWERS-2/1 Buydown
\.A form of pre-paid interest which effectively increases the yield on the loan
above the amount of the stated interest rate - ANSWERS-Discount Point
\.An amount in addition to the Loan to Value, which simply represents the first
position mortgage or loan as a percentage of the property's value - ANSWERS-
CLTV
Combined Loan to Value
\.Ratio of a loan to the value of an asset purchased - ANSWERS-LTV
Loan to Value
\.Principal, Interest, Taxes, Insurance
Refers to the components of a mortgage payment - ANSWERS-PITI
\.Housing to Debt
Ratio that measures an individual's ability to manage monthly payment and repay
debts - ANSWERS-DIF
\.Agreement between the lender and the borrower to delay foreclosure -
ANSWERS-Forbearance
