MLO Practice Test Questions and Answers | Latest Update | 2024/2025 | Already Passed

MLO Practice Test Questions and Answers | Latest Update | 2024/2025 | Already Passed A borrower is applying for a loan on a single-family residence. His income is $21.50 per hour and he works 40 hours a week. He is paid semi-monthly. The loan. Originator has calculated the principal and interest Houston payment at $755 per month and the monthly escrow payment is $135. The current monthly debts are a car payment for $289, a credit card for $49, a cell phone bill for $63 and utilities of $102. What is his Houston expense ratio? 1. 23.87 2. 34.60 3. 37.38 4. 20.25 1. 23.87 A borrower is self employed. What may be added to his income? 1. Mileage 2. Depreciation 3. Business expense 4. Nothing 2. Depreciation, because it is a non cash expense A borrower wanted to determine if the loan included prepayment penalties. Which of the following documents would not include prepayment penalty information? 1. TILA disclosures 2. Hud-1 3. GFE 4. Promissory Note 2. Hud-1..TILA disclosure, GFE, and the promissory note all include prepayment penalty information. A client wants a 30 year loan with a note rate of 5.5% and the builder has agreed to pay all the fees for a temporary 2/1 buydown, which will save the client $200 per month for the first year and $100 per month for the second year. Which of the following statements is incorrect? 1. The total cost to the builder will be $3600 2. The rate during the first year will be 3.5% 3. The borrower will have a rate of 4.5% after year two 4. The borrower will not be required to make a full mortgage payment for 2 years 3. The borrower will have a rate of 4.5% after year two...a temporary 2/1 buydown loan allows the borrower to have a reduced rate in the first & second years. A 2% reduction in year 1 and a 1% reduction in year 2. With this 2/1 buydown the rate will be 2% less in year one = 3.5% and 1% less in year 2 = 4.5% and the note rate of 5.5% from year 3 for the balance of the loan. The borrower will make reduced payments during the first 2 years and the builder will cover the difference between the amount due and the reduced amount. A husband and wife are co-owners of their primary residence. They are entering into a refinance transaction. The husband receives one copy of the notice of the right to rescind, however, the wife receives no disclosures. What is the deadline for rescission? 1. 3 years 2. 3 days 3. 3 business days 4. By midnight of the third business day 1. 3 years..when all owners do not receive the disclosures informing them of their right to rescind. The rescission period extends to 3 years A lender has an affiliated business arrangement with a third party service provider. Under what circumstances can the lender require a borrower to use the services in a loan transaction? 1. If there is no kickback or referral fees & the service provider is an attorney, credit reporting agency or appraiser 2. Always as long as there is no kickback or referral fee 3. If the lender has an ownership interest if 1% or more in the third party service provider 4. Under no circumstances. It would be a violation of RESPA. 1. If there is no kickback or referral fees and the service provider is an attorney, credit reporting agency or appraiser. A mortgage advertisement states "Monthly payments of only $800. What other information should the ad include? 1. APR, finance charges, down payment amount