Page 1 of 29
19 May 2026
NMLS MLO PREP EXAM –150 ACCURATE QUESTIONS
WITH CORRECT ANSWER 2026/2027 LATEST EXAM
UPDATE GUARANTEE HIGH PASS MARK
A borrower makes $124,800 per year. The mortgage payment is $1,805 per month, and does not
include an escrow account. The annual property taxes are $2,400, and the homeowners insurance
premium is $900 per year. What is their housing ratio?
a. 17%
b. 20%
c. 22%
d. 24% - CORRECT ANSWER-b. 20%
What approach is MOST often used to determine a property's value on a residential appraisal?
a. Cost Approach
b. Income Approach
c. Sales Comparison/Market Approach
d. Base Value Approach - CORRECT ANSWER-c. Sales Comparison/Market Approach
Once an application is received, what is the frame to inform a borrower of the right to receive an
appraisal?
a. 3 business days
b. 5 business days
c. 7 business days
d. 14 business days - CORRECT ANSWER-a. 3 business days
What is the difference between a full title report and a preliminary title report?
a. A preliminary title report is issued prior to closing, and the full title report is issued after closing
b. A preliminary title report is required on purchases, and a full title report is required on refinances
c. A preliminary title report shows the current owner all current liens, and a full title report includes
the same information plus all the transfers of ownership over the last 30 years or more
d. A preliminary title report is only required on cash-only transactions, and a full title report is only
requested on transactions that include a mortgage - CORRECT ANSWER-c. A preliminary title
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19 May 2026
report shows the current owner all current liens, and a full title report includes the same information
plus all the transfers of ownership over the last 30 years or more
A borrower is purchasing a home for $400,000, with a 10% down payment. The lender is charging
1.75% in discount points. How much will that cost the borrower?
a. $5,5400
b. $5,600
c. $6,300
d. $7,000 - CORRECT ANSWER-c. $6,300
Which description is true regarding discount points?
a. A fee paid to a lender for a lower interest rate
b. A fee paid to a lender for reduced closing costs
c. A fee paid to a lender only on fixed-rate mortgages
d. A fee paid to a lender only on adjustable rate mortgages - CORRECT ANSWER-a. A fee paid to a
lender for a lower interest rate
Which statement is NOT true regarding per diem interest?
a. It is the daily interest on a mortgage that is outside of the regular prepayment schedule
b. It is a factor only on adjustable rate mortgages
c. It is paid for at the mortgage closing
d. It can be a credit back to a borrower at closing - CORRECT ANSWER-b. It is a factor only on
adjustable rate mortgages
What is the standard due date and grace period for a mortgage payment?
a. Due on the first of the month with a 5-day grace period
b. Due on the fifth of the month with a 5-day grace period
c. Due on the first of the month with a 15-day grace period
d. Due on the fifth of the month with a 15-day grace period - CORRECT ANSWER-c. Due on the first
of the month with a 15-day grace period
What would be considered an example of redlining?
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19 May 2026
a. Denying financial services based on a particular neighborhood
b. Denying financial services based on a certain credit score
c. Denying financial services based on a minimum income
d. Denying financial services based on a lack of assets - CORRECT ANSWER-a. Denying financial
services based on a particular neighborhood
A mortgage lender pays a realtor $500 for referring him or her to a borrower. According to the
Real Estate Settlement and Procedures Act (RESPA), what would this be called?
a. A Referral Fee
b. A Gift
c. A Commission
d. A Kickback - CORRECT ANSWER-d. A kickback
A mortgage loan originator has taken an application for an owner-occupied property. The
borrower has indicated that he or she now does not intend to occupy the property. If the MLO
does not change the occupancy type of the subject property, what is this considered?
a. A clerical error
b. A benefit to the borrower
c. Occupancy fraud
d. Nonowner occupied - CORRECT ANSWER-c. Occupancy fraud
What would be considered a red flag on a sales contract?
a. Personal property is listed on the contract
b. There are three borrowers on the contract
c. The buyer and the seller are related
d. The closing date is 60 days from the date the offer was accepted - CORRECT ANSWER-c. The
buyer and seller are related
When a lender advertises a low interest rate for a product that is seldom used, and then
encourages a borrower to go with a product that has a higher rate, what is this called?
a. Bait and switch
b. Salesmanship
c. Rate inflation
19 May 2026
NMLS MLO PREP EXAM –150 ACCURATE QUESTIONS
WITH CORRECT ANSWER 2026/2027 LATEST EXAM
UPDATE GUARANTEE HIGH PASS MARK
A borrower makes $124,800 per year. The mortgage payment is $1,805 per month, and does not
include an escrow account. The annual property taxes are $2,400, and the homeowners insurance
premium is $900 per year. What is their housing ratio?
a. 17%
b. 20%
c. 22%
d. 24% - CORRECT ANSWER-b. 20%
What approach is MOST often used to determine a property's value on a residential appraisal?
a. Cost Approach
b. Income Approach
c. Sales Comparison/Market Approach
d. Base Value Approach - CORRECT ANSWER-c. Sales Comparison/Market Approach
Once an application is received, what is the frame to inform a borrower of the right to receive an
appraisal?
a. 3 business days
b. 5 business days
c. 7 business days
d. 14 business days - CORRECT ANSWER-a. 3 business days
What is the difference between a full title report and a preliminary title report?
a. A preliminary title report is issued prior to closing, and the full title report is issued after closing
b. A preliminary title report is required on purchases, and a full title report is required on refinances
c. A preliminary title report shows the current owner all current liens, and a full title report includes
the same information plus all the transfers of ownership over the last 30 years or more
d. A preliminary title report is only required on cash-only transactions, and a full title report is only
requested on transactions that include a mortgage - CORRECT ANSWER-c. A preliminary title
, Page 2 of 29
19 May 2026
report shows the current owner all current liens, and a full title report includes the same information
plus all the transfers of ownership over the last 30 years or more
A borrower is purchasing a home for $400,000, with a 10% down payment. The lender is charging
1.75% in discount points. How much will that cost the borrower?
a. $5,5400
b. $5,600
c. $6,300
d. $7,000 - CORRECT ANSWER-c. $6,300
Which description is true regarding discount points?
a. A fee paid to a lender for a lower interest rate
b. A fee paid to a lender for reduced closing costs
c. A fee paid to a lender only on fixed-rate mortgages
d. A fee paid to a lender only on adjustable rate mortgages - CORRECT ANSWER-a. A fee paid to a
lender for a lower interest rate
Which statement is NOT true regarding per diem interest?
a. It is the daily interest on a mortgage that is outside of the regular prepayment schedule
b. It is a factor only on adjustable rate mortgages
c. It is paid for at the mortgage closing
d. It can be a credit back to a borrower at closing - CORRECT ANSWER-b. It is a factor only on
adjustable rate mortgages
What is the standard due date and grace period for a mortgage payment?
a. Due on the first of the month with a 5-day grace period
b. Due on the fifth of the month with a 5-day grace period
c. Due on the first of the month with a 15-day grace period
d. Due on the fifth of the month with a 15-day grace period - CORRECT ANSWER-c. Due on the first
of the month with a 15-day grace period
What would be considered an example of redlining?
, Page 3 of 29
19 May 2026
a. Denying financial services based on a particular neighborhood
b. Denying financial services based on a certain credit score
c. Denying financial services based on a minimum income
d. Denying financial services based on a lack of assets - CORRECT ANSWER-a. Denying financial
services based on a particular neighborhood
A mortgage lender pays a realtor $500 for referring him or her to a borrower. According to the
Real Estate Settlement and Procedures Act (RESPA), what would this be called?
a. A Referral Fee
b. A Gift
c. A Commission
d. A Kickback - CORRECT ANSWER-d. A kickback
A mortgage loan originator has taken an application for an owner-occupied property. The
borrower has indicated that he or she now does not intend to occupy the property. If the MLO
does not change the occupancy type of the subject property, what is this considered?
a. A clerical error
b. A benefit to the borrower
c. Occupancy fraud
d. Nonowner occupied - CORRECT ANSWER-c. Occupancy fraud
What would be considered a red flag on a sales contract?
a. Personal property is listed on the contract
b. There are three borrowers on the contract
c. The buyer and the seller are related
d. The closing date is 60 days from the date the offer was accepted - CORRECT ANSWER-c. The
buyer and seller are related
When a lender advertises a low interest rate for a product that is seldom used, and then
encourages a borrower to go with a product that has a higher rate, what is this called?
a. Bait and switch
b. Salesmanship
c. Rate inflation
