NMLS EXAM PREP Questions and Answers With Verified Solutions 2025
On what page of the Closing Disclosure would the consumer find information about the cash needed to
close, in comparison to information on the Loan Estimate? - ✔✔Page 3
This is calculated by dividing PITI by the borrower's monthly gross income: - ✔✔Housing expense ratio
You have taken a loan application from a customer with an excellent credit score. When should you
advise him/her about the status of the application? - ✔✔Within 30 days
The Smiths are buying a house for $200,000. After their 10% down payment, they've decided to pay two
discount points. What is the dollar amount of the discount points? - ✔✔$3,600
A mortgage broker structures a higher-priced loan with two points in borrower credit because the
borrower has limited cash to close, and suggests the borrower use the premium generated to subsidize
the closing costs. After consideration, the borrower agrees and moves forward. This is: - ✔✔Legal and
ethical
On which portion of the loan application would one find a street address and legal description of the
property? - ✔✔Section II
The regulations issued for the implementation of ECOA are known as: - ✔✔Regulation B
What is the maximum fee that may be charged for preparation of the Closing Disclosure? - ✔✔.1% of
the loan amount
$50
$0
1% of the loan amount X
Regulations in Section 32 of Regulation Z deal strictly with: - ✔✔Consumer protections triggered by
high-cost loan scenarios.
, Don is refinancing his home in order to save money. If the loan goes through, his payment will drop from
$2,000 per month (PITI) to $1,500 per month (PITI). Don's gross income each month is $6,800, but he
has a $300 car payment, a $150 credit card payment, and monthly alimony payments of $1,300. What is
Don's housing ratio on the proposed loan? - ✔✔22%
The most commonly used type of reverse mortgage is known as a: - ✔✔Home equity conversion
mortgage.
In an ARM, margin is determined by: - ✔✔The lender, and it represents the lender's operating costs and
profit margin.
All of the following are true of FHA fixed-rate loans, except: - ✔✔The borrower is only required to carry
MIP until the LTV reaches 78%
Each violation of federal law prohibiting bank fraud may lead to a penalty of up to ________,
imprisonment for up to ________, or both. - ✔✔$1 million; 30 years
An ARM loan has a 4.00% start rate, and it is time for the first adjustment to be made. It has a periodic
cap of 1% and a lifetime cap of 5%. Assuming that the rate is going to increase, what will the rate be
after its first adjustment? - ✔✔5%
The front end ratio is: - ✔✔A comparison of the borrower's monthly housing expense and his or her
income.
Who is responsible for ensuring that the Closing Disclosure is delivered to the consumer? - ✔✔The
creditor
An appraiser uses any one of three appraisal approaches to determine the value of a property. They are:
- ✔✔Sales comparison (or market), cost, and income
The generally accepted appraisal standards in the United States are known as: - ✔✔USPAP
On what page of the Closing Disclosure would the consumer find information about the cash needed to
close, in comparison to information on the Loan Estimate? - ✔✔Page 3
This is calculated by dividing PITI by the borrower's monthly gross income: - ✔✔Housing expense ratio
You have taken a loan application from a customer with an excellent credit score. When should you
advise him/her about the status of the application? - ✔✔Within 30 days
The Smiths are buying a house for $200,000. After their 10% down payment, they've decided to pay two
discount points. What is the dollar amount of the discount points? - ✔✔$3,600
A mortgage broker structures a higher-priced loan with two points in borrower credit because the
borrower has limited cash to close, and suggests the borrower use the premium generated to subsidize
the closing costs. After consideration, the borrower agrees and moves forward. This is: - ✔✔Legal and
ethical
On which portion of the loan application would one find a street address and legal description of the
property? - ✔✔Section II
The regulations issued for the implementation of ECOA are known as: - ✔✔Regulation B
What is the maximum fee that may be charged for preparation of the Closing Disclosure? - ✔✔.1% of
the loan amount
$50
$0
1% of the loan amount X
Regulations in Section 32 of Regulation Z deal strictly with: - ✔✔Consumer protections triggered by
high-cost loan scenarios.
, Don is refinancing his home in order to save money. If the loan goes through, his payment will drop from
$2,000 per month (PITI) to $1,500 per month (PITI). Don's gross income each month is $6,800, but he
has a $300 car payment, a $150 credit card payment, and monthly alimony payments of $1,300. What is
Don's housing ratio on the proposed loan? - ✔✔22%
The most commonly used type of reverse mortgage is known as a: - ✔✔Home equity conversion
mortgage.
In an ARM, margin is determined by: - ✔✔The lender, and it represents the lender's operating costs and
profit margin.
All of the following are true of FHA fixed-rate loans, except: - ✔✔The borrower is only required to carry
MIP until the LTV reaches 78%
Each violation of federal law prohibiting bank fraud may lead to a penalty of up to ________,
imprisonment for up to ________, or both. - ✔✔$1 million; 30 years
An ARM loan has a 4.00% start rate, and it is time for the first adjustment to be made. It has a periodic
cap of 1% and a lifetime cap of 5%. Assuming that the rate is going to increase, what will the rate be
after its first adjustment? - ✔✔5%
The front end ratio is: - ✔✔A comparison of the borrower's monthly housing expense and his or her
income.
Who is responsible for ensuring that the Closing Disclosure is delivered to the consumer? - ✔✔The
creditor
An appraiser uses any one of three appraisal approaches to determine the value of a property. They are:
- ✔✔Sales comparison (or market), cost, and income
The generally accepted appraisal standards in the United States are known as: - ✔✔USPAP
