NMLS Exam Questions and Answers
1.The preferred debt-to-income ratio for applicants for VA loans is
A. 35%
B. 43%
C. 50%
D. 41%
Answers D. 41%
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
Answers B. If a licensee fails to request a hearing with the state
regulator
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
,Answers C. The original VA loan is satisfied
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
Answers B. Make amortizing payments that are calculated using the
fully indexed rate for the ARM
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
Answers B. Earnest money
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
Answers B. None; Leilani's tasks are complete
7.In order for a small creditor to originate a balloon payment qualified
mort- gage, the small creditor must hold the loan in its portfolio for
A. Twelve months
B. Three years
C. Two years
D. Five years
Answers B. Three years
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
Answers B. Seller carry-back
9.Which section of the URLA contains questions which, depending on
, the applicant's answer, could result in immediate rejection of the
application?
A. Information for Government Monitoring Purposes
B. Declarations
C. Details of the Transaction
D. Acknowledgement and Agreement
Answers B. Declarations
10.With what type of loan do payments, including principal and
interest, remain constant throughout the life of the loan?
A. A balloon loan, as long as the maturity date is beyond ten years
B. An ARM with a conversion option
C. Fixed rate
D. An FHA loan
Answers C. Fixed rate
11.If a financial institution intends to share consumer information with
non- affiliated third parties, an initial privacy notice is due to a consumer at
what point?
A. Within seven business days of a customer providing nonpublic
personal information sufficient to pull a credit report
B. Within three business days of initial contact between the consumer and
the financial institution
C. No later than three business days prior to settlement
D. No later than the time at which a customer relationship is established
1.The preferred debt-to-income ratio for applicants for VA loans is
A. 35%
B. 43%
C. 50%
D. 41%
Answers D. 41%
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
Answers B. If a licensee fails to request a hearing with the state
regulator
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
,Answers C. The original VA loan is satisfied
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
Answers B. Make amortizing payments that are calculated using the
fully indexed rate for the ARM
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
Answers B. Earnest money
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
Answers B. None; Leilani's tasks are complete
7.In order for a small creditor to originate a balloon payment qualified
mort- gage, the small creditor must hold the loan in its portfolio for
A. Twelve months
B. Three years
C. Two years
D. Five years
Answers B. Three years
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
Answers B. Seller carry-back
9.Which section of the URLA contains questions which, depending on
, the applicant's answer, could result in immediate rejection of the
application?
A. Information for Government Monitoring Purposes
B. Declarations
C. Details of the Transaction
D. Acknowledgement and Agreement
Answers B. Declarations
10.With what type of loan do payments, including principal and
interest, remain constant throughout the life of the loan?
A. A balloon loan, as long as the maturity date is beyond ten years
B. An ARM with a conversion option
C. Fixed rate
D. An FHA loan
Answers C. Fixed rate
11.If a financial institution intends to share consumer information with
non- affiliated third parties, an initial privacy notice is due to a consumer at
what point?
A. Within seven business days of a customer providing nonpublic
personal information sufficient to pull a credit report
B. Within three business days of initial contact between the consumer and
the financial institution
C. No later than three business days prior to settlement
D. No later than the time at which a customer relationship is established
