NMLS SAFE EXAM 2026-2027 QUESTIONS
AND ANSWERS GRADED A+
C. The maximum the rate can increase over the life of the loan
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
B. The borrower qualified at the buydown rate
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
A. Age
All of the following are violations of the Fair Housing Act EXCEPT
A. Age
,B. National Origin
C. Disability
D.Religion
Encrumbrance
Claim against property held by one who is not the legal owner
Trigger Term
Advertised term that requires additional disclosures
Advertising Disclosure
An advertisement must be presented "clearly and conspicuously" to keep from
being deceptive, unfair, or otherwise violate a Commission rule
Waving Right of Rescission
Extenuating circumstances such as "bona fide personal financial emergency
Primary Mortgage Market
Where credit institutions originate loans
Right of Rescission
,Right that borrowers have to cancel a loan or line of credit with a lender within
three days of closing
Business Day
When creditors office is open to the public, a calendar working day except Sunday
or a federal holiday
Application
Financial information used for purposes of obtaining an extension of credit
Disclosure
The act of making new information known
FTC
Federal Trade Commission
Mission is to promote consumer protection and eliminate and prevent
anticompetitive business practices
CFPB
Consumer Financial Protection Bureau
Regulatory agency charged with overseeing financial products and services offered
to consumers
, TILA
Truth in Lending Act
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
Per Diem Interest
Interest charged on a loan for one or more days
Annual Interest Rate Formula
Principal (X) Interest Rate = Annual Interest Rate
Interest Only Mortgage
Mortgage where the mortgagor is only required to pay off the interest that arises
from the principal that is borrowed for a set period
Permanent Buydown
Borrower chooses to pay additional "discount points" to buy down the interest rate
for the life of the mortgage note
AND ANSWERS GRADED A+
C. The maximum the rate can increase over the life of the loan
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
B. The borrower qualified at the buydown rate
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
A. Age
All of the following are violations of the Fair Housing Act EXCEPT
A. Age
,B. National Origin
C. Disability
D.Religion
Encrumbrance
Claim against property held by one who is not the legal owner
Trigger Term
Advertised term that requires additional disclosures
Advertising Disclosure
An advertisement must be presented "clearly and conspicuously" to keep from
being deceptive, unfair, or otherwise violate a Commission rule
Waving Right of Rescission
Extenuating circumstances such as "bona fide personal financial emergency
Primary Mortgage Market
Where credit institutions originate loans
Right of Rescission
,Right that borrowers have to cancel a loan or line of credit with a lender within
three days of closing
Business Day
When creditors office is open to the public, a calendar working day except Sunday
or a federal holiday
Application
Financial information used for purposes of obtaining an extension of credit
Disclosure
The act of making new information known
FTC
Federal Trade Commission
Mission is to promote consumer protection and eliminate and prevent
anticompetitive business practices
CFPB
Consumer Financial Protection Bureau
Regulatory agency charged with overseeing financial products and services offered
to consumers
, TILA
Truth in Lending Act
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
Per Diem Interest
Interest charged on a loan for one or more days
Annual Interest Rate Formula
Principal (X) Interest Rate = Annual Interest Rate
Interest Only Mortgage
Mortgage where the mortgagor is only required to pay off the interest that arises
from the principal that is borrowed for a set period
Permanent Buydown
Borrower chooses to pay additional "discount points" to buy down the interest rate
for the life of the mortgage note
