NMLS PRACTICE TEST HARD
QUESTIONS WITH ALL SOLUTIONS
A discount point is BEST described as a charge the borrower pays to:
V V V V V V V V V V V V
A.) A lender to decrease the interest rate on the mortgage loan
V V V V V V V V V V V
B.) A mortgage broker at the time of application to obtain a favorable rate
V V V V V V V V V V V V V
C.) The seller as part of the closing costs of a loan
V V V V V V V V V V V
D.) A lender to ensure against foreclosure - correct answer- A.) A lender to
V V V V V V V VV V V V V V
decrease the interest rate on the mortgage loan
V V V V V V V V
A buyer has made an earnest money payment of $5,000. The buyer pays an
V V V V V V V V V V V V V
additional $2,000 in option money to be credited at closing on property with sale
V V V V V V V V V V V V V V
price of $160,000. If the required down payment is 20%, how much additional
V V V V V V V V V V V V V
money will the buyer need to provide toward the down payment at closing?
V V V V V V V V V V V V V
A.) $32,000
V
B.) $27,000
V
C.) $30,000
V
D.) $25,000 - correct answer- D.) $25,000
V V VV V V V
$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
V V V V V V V V V
If an applicant works 40 hours every week and is paid $13.52 per hour, what is the
V V V V V V V V V V V V V V V V
Vapplicant's monthly income? V V
A.) $2,163.20
V
B.) $2,343.47
V
C.) $2,379.52
V
D.) $2,487.68 - correct answer- B.) $2,343.47
V V VV V V V
,$13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343.47
V V V V V V V V V V V V V
Monthly income
V V
The requirement for private mortgage insurance is generally is continued when the
V V V V V V V V V V V
loan-to-value ratio falls below:
V V V V
A.) 20%
V
B.) 50%
V
C.) 80%
V
D.) 90% - correct answer- C.) 80%
V V VV V V V
Which of the following documents itemizes all settlement costs including lender
V V V V V V V V V V
charges?
V
A.) Agreement of sale
V V V
B.) HUD-1/closing Disclosure
V V
C.) Form 1003
V V
D.) Forbearance agreement - correct answer- B.) HUD-1/closing Disclosure
V V V VV V V V V
According to the Truth-in-Lending Act (TILA), the term "refinance" applies to
V V V V V V V V V V
A.) A change in a payment schedule
V V V V V V
B.) A reduction in annual percentage rate
V V V V V V
C.) The renewal of a single payment obligation with no change in the original terms
V V V V V V V V V V V V V V
D.) The satisfaction of an existing obligation and its replacement by a new
V V V V V V V V V V V V
obligation - correct answer- D.) The satisfaction of an existing obligation and its
V V VV V V V V V V V V V V
replacement by a new obligation
V V V V V
What does a loan originator use to determine the estimated value of a property
V V V V V V V V V V V V V
based on an analytical comparison of similar property sales?
V V V V V V V V V
A.) An appraisal
V V
B.) A market survey
V V V
C.) An area survey
V V V
D.) A Cost-benefit analysis - correct answer- A.) An appraisal
V V V V VV V V V V
Which of the following methods of disclosure does NOT meet the requirements of
V V V V V V V V V V V V
Equal Credit Opportunity Act (ECOA)?
V V V V V
A.) E-mail
V
B.) Mailed letter
V V
C.) Telephone
V
D.) Faxed letter - correct answer- C.) Telephone
V V V VV V V V
Term "20 basis points" expressed as a percentage is:
V V V V V V V V
A.) 0.2%
V
B.) 0.20%
V
C.) 2.00%
V
D.) 20.00% - correct answer- B.) 0.20%
V V VV V V V
, one hundredth of one percent, used chiefly in expressing differences of interest
V V V V V V V V V V V
rates. 0.01
V V
so 0.01 x20 = 0.2
V V V V
According to the Truth-in-Lending Act (TILA), which if the following fees is
V V V V V V V V V V V
EXCLUDED from the calculation of the annual percentage rate?
V V V V V V V V V
A.) Hazard insurance
V V
B.) Wire transfer
V V
C.) Prepaid interest
V V
D.) Mortgage insurance premiums - correct answer- A.) Hazard insurance
V V V V VV V V V V
FHA loans are: V V
A.) Partially guaranteed
V V
B.) 100% insured
V V
C.) Exempt V
D.) Entitled - correct answer- A.) Partially guaranteed
V V VV V V V V
The late fee for a conventional loan is:
V V V V V V V
A.) 3% of principle and interest
V V V V V
B.) 4% of principle and interest
V V V V V
C.) 5% of principle and interest
V V V V V
D.) 10% of principle and interest - correct answer- C.) 5% of principle and interest
V V V V V V VV V V V V V V V
A funding fee if required for a:
V V V V V V
A.) FHA loanV V
B.) VA loan V V
C.) Jumbo loan
V V
D.) Conventional loan - correct answer- B.) VA loan
V V V VV V V V V
A Mortgage Insurance Premium is required on:
V V V V V V
A.) FHA loanV V
B.) VA loan V V
C.) Jumbo loan
V V
D.) Conventional loan - correct answer- A.) FHA loan
V V V VV V V V V
The mortgagee is the:
V V V
A.) BorrowerV
B.) Lender V
C.) Closing agent
V V
D.) Mortgage broker - correct answer- B.) Lender
V V V VV V V V
The borrower does NOT sign which document:
V V V V V V
QUESTIONS WITH ALL SOLUTIONS
A discount point is BEST described as a charge the borrower pays to:
V V V V V V V V V V V V
A.) A lender to decrease the interest rate on the mortgage loan
V V V V V V V V V V V
B.) A mortgage broker at the time of application to obtain a favorable rate
V V V V V V V V V V V V V
C.) The seller as part of the closing costs of a loan
V V V V V V V V V V V
D.) A lender to ensure against foreclosure - correct answer- A.) A lender to
V V V V V V V VV V V V V V
decrease the interest rate on the mortgage loan
V V V V V V V V
A buyer has made an earnest money payment of $5,000. The buyer pays an
V V V V V V V V V V V V V
additional $2,000 in option money to be credited at closing on property with sale
V V V V V V V V V V V V V V
price of $160,000. If the required down payment is 20%, how much additional
V V V V V V V V V V V V V
money will the buyer need to provide toward the down payment at closing?
V V V V V V V V V V V V V
A.) $32,000
V
B.) $27,000
V
C.) $30,000
V
D.) $25,000 - correct answer- D.) $25,000
V V VV V V V
$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
V V V V V V V V V
If an applicant works 40 hours every week and is paid $13.52 per hour, what is the
V V V V V V V V V V V V V V V V
Vapplicant's monthly income? V V
A.) $2,163.20
V
B.) $2,343.47
V
C.) $2,379.52
V
D.) $2,487.68 - correct answer- B.) $2,343.47
V V VV V V V
,$13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343.47
V V V V V V V V V V V V V
Monthly income
V V
The requirement for private mortgage insurance is generally is continued when the
V V V V V V V V V V V
loan-to-value ratio falls below:
V V V V
A.) 20%
V
B.) 50%
V
C.) 80%
V
D.) 90% - correct answer- C.) 80%
V V VV V V V
Which of the following documents itemizes all settlement costs including lender
V V V V V V V V V V
charges?
V
A.) Agreement of sale
V V V
B.) HUD-1/closing Disclosure
V V
C.) Form 1003
V V
D.) Forbearance agreement - correct answer- B.) HUD-1/closing Disclosure
V V V VV V V V V
According to the Truth-in-Lending Act (TILA), the term "refinance" applies to
V V V V V V V V V V
A.) A change in a payment schedule
V V V V V V
B.) A reduction in annual percentage rate
V V V V V V
C.) The renewal of a single payment obligation with no change in the original terms
V V V V V V V V V V V V V V
D.) The satisfaction of an existing obligation and its replacement by a new
V V V V V V V V V V V V
obligation - correct answer- D.) The satisfaction of an existing obligation and its
V V VV V V V V V V V V V V
replacement by a new obligation
V V V V V
What does a loan originator use to determine the estimated value of a property
V V V V V V V V V V V V V
based on an analytical comparison of similar property sales?
V V V V V V V V V
A.) An appraisal
V V
B.) A market survey
V V V
C.) An area survey
V V V
D.) A Cost-benefit analysis - correct answer- A.) An appraisal
V V V V VV V V V V
Which of the following methods of disclosure does NOT meet the requirements of
V V V V V V V V V V V V
Equal Credit Opportunity Act (ECOA)?
V V V V V
A.) E-mail
V
B.) Mailed letter
V V
C.) Telephone
V
D.) Faxed letter - correct answer- C.) Telephone
V V V VV V V V
Term "20 basis points" expressed as a percentage is:
V V V V V V V V
A.) 0.2%
V
B.) 0.20%
V
C.) 2.00%
V
D.) 20.00% - correct answer- B.) 0.20%
V V VV V V V
, one hundredth of one percent, used chiefly in expressing differences of interest
V V V V V V V V V V V
rates. 0.01
V V
so 0.01 x20 = 0.2
V V V V
According to the Truth-in-Lending Act (TILA), which if the following fees is
V V V V V V V V V V V
EXCLUDED from the calculation of the annual percentage rate?
V V V V V V V V V
A.) Hazard insurance
V V
B.) Wire transfer
V V
C.) Prepaid interest
V V
D.) Mortgage insurance premiums - correct answer- A.) Hazard insurance
V V V V VV V V V V
FHA loans are: V V
A.) Partially guaranteed
V V
B.) 100% insured
V V
C.) Exempt V
D.) Entitled - correct answer- A.) Partially guaranteed
V V VV V V V V
The late fee for a conventional loan is:
V V V V V V V
A.) 3% of principle and interest
V V V V V
B.) 4% of principle and interest
V V V V V
C.) 5% of principle and interest
V V V V V
D.) 10% of principle and interest - correct answer- C.) 5% of principle and interest
V V V V V V VV V V V V V V V
A funding fee if required for a:
V V V V V V
A.) FHA loanV V
B.) VA loan V V
C.) Jumbo loan
V V
D.) Conventional loan - correct answer- B.) VA loan
V V V VV V V V V
A Mortgage Insurance Premium is required on:
V V V V V V
A.) FHA loanV V
B.) VA loan V V
C.) Jumbo loan
V V
D.) Conventional loan - correct answer- A.) FHA loan
V V V VV V V V V
The mortgagee is the:
V V V
A.) BorrowerV
B.) Lender V
C.) Closing agent
V V
D.) Mortgage broker - correct answer- B.) Lender
V V V VV V V V
The borrower does NOT sign which document:
V V V V V V
