NMLS Practice Test Hard Questions WITH |\ |\ |\ |\ |\ |\
ANSWERS
A discount point is BEST described as a charge the borrower pays
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
to:
|\
A.) A lender to decrease the interest rate on the mortgage loan
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
B.) A mortgage broker at the time of application to obtain a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
favorable rate |\
C.) The seller as part of the closing costs of a loan
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
D.) A lender to ensure against foreclosure - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔A.) A lender to decrease the interest rate on the mortgage
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
loan
A buyer has made an earnest money payment of $5,000. The
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
buyer pays an additional $2,000 in option money to be credited
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
at closing on property with sale price of $160,000. If the required
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
down payment is 20%, how much additional money will the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
buyer need to provide toward the down payment at closing?
|\ |\ |\ |\ |\ |\ |\ |\ |\
A.) $32,000 |\
B.) $27,000 |\
C.) $30,000 |\
D.) $25,000 - CORRECT ANSWERS ✔✔D.) $25,000
|\ |\ |\ |\ |\ |\
,$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
|\ |\ |\ |\ |\ |\ |\ |\ |\
If an applicant works 40 hours every week and is paid $13.52 per
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
hour, what is the applicant's monthly income?
|\ |\ |\ |\ |\ |\ |\
A.) $2,163.20
|\
B.) $2,343.47
|\
C.) $2,379.52
|\
D.) $2,487.68 - CORRECT ANSWERS ✔✔B.) $2,343.47
|\ |\ |\ |\ |\ |\
$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 ANSWERS ✔✔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 ANSWERS ✔✔B.)
|\ |\ |\ |\ |\ |\
HUD-1/closing Disclosure
|\ |\
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 ANSWERS ✔✔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 ANSWERS ✔✔A.) An
|\ |\ |\ |\ |\ |\ |\ |\ |\
appraisal
, 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 ANSWERS ✔✔C.) Telephone
|\ |\ |\ |\ |\ |\ |\
Term "20 basis points" expressed as a percentage is:
|\ |\ |\ |\ |\ |\ |\ |\
A.) 0.2%
|\
B.) 0.20%
|\
C.) 2.00%
|\
D.) 20.00% - CORRECT ANSWERS ✔✔B.) 0.20%
|\ |\ |\ |\ |\ |\
one hundredth of one percent, used chiefly in expressing
|\ |\ |\ |\ |\ |\ |\ |\ |\
differences of interest rates. 0.01 |\ |\ |\ |\
so 0.01 x20 = 0.2
|\ |\ |\ |\
According to the Truth-in-Lending Act (TILA), which if the
|\ |\ |\ |\ |\ |\ |\ |\ |\
following fees is EXCLUDED from the calculation of the annual
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
percentage rate? |\
ANSWERS
A discount point is BEST described as a charge the borrower pays
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
to:
|\
A.) A lender to decrease the interest rate on the mortgage loan
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
B.) A mortgage broker at the time of application to obtain a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
favorable rate |\
C.) The seller as part of the closing costs of a loan
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
D.) A lender to ensure against foreclosure - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔A.) A lender to decrease the interest rate on the mortgage
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
loan
A buyer has made an earnest money payment of $5,000. The
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
buyer pays an additional $2,000 in option money to be credited
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
at closing on property with sale price of $160,000. If the required
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
down payment is 20%, how much additional money will the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
buyer need to provide toward the down payment at closing?
|\ |\ |\ |\ |\ |\ |\ |\ |\
A.) $32,000 |\
B.) $27,000 |\
C.) $30,000 |\
D.) $25,000 - CORRECT ANSWERS ✔✔D.) $25,000
|\ |\ |\ |\ |\ |\
,$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
|\ |\ |\ |\ |\ |\ |\ |\ |\
If an applicant works 40 hours every week and is paid $13.52 per
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
hour, what is the applicant's monthly income?
|\ |\ |\ |\ |\ |\ |\
A.) $2,163.20
|\
B.) $2,343.47
|\
C.) $2,379.52
|\
D.) $2,487.68 - CORRECT ANSWERS ✔✔B.) $2,343.47
|\ |\ |\ |\ |\ |\
$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 ANSWERS ✔✔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 ANSWERS ✔✔B.)
|\ |\ |\ |\ |\ |\
HUD-1/closing Disclosure
|\ |\
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 ANSWERS ✔✔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 ANSWERS ✔✔A.) An
|\ |\ |\ |\ |\ |\ |\ |\ |\
appraisal
, 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 ANSWERS ✔✔C.) Telephone
|\ |\ |\ |\ |\ |\ |\
Term "20 basis points" expressed as a percentage is:
|\ |\ |\ |\ |\ |\ |\ |\
A.) 0.2%
|\
B.) 0.20%
|\
C.) 2.00%
|\
D.) 20.00% - CORRECT ANSWERS ✔✔B.) 0.20%
|\ |\ |\ |\ |\ |\
one hundredth of one percent, used chiefly in expressing
|\ |\ |\ |\ |\ |\ |\ |\ |\
differences of interest rates. 0.01 |\ |\ |\ |\
so 0.01 x20 = 0.2
|\ |\ |\ |\
According to the Truth-in-Lending Act (TILA), which if the
|\ |\ |\ |\ |\ |\ |\ |\ |\
following fees is EXCLUDED from the calculation of the annual
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
percentage rate? |\
