NMLS Practice Test Hard Questions with correct
answers (100%) verified
1. A discount point is BEST described as a charge the borrower pays to:
A.) A lender to decrease the interest rate on the mortgage loan
B.) A mortgage broker at the time of application to obtain a favorable rate C.)
The seller as part of the closing costs of a loan
ANSWERA lender to ensure against foreclosure
ANSWERA lender to decrease the interestrate on the mortgage loan
2. A buyer has made an earnest money payment of $5,000. The buyer pays an
additional $2,000 in option money to be credited at closing on property with
sale price of $160,000. If the required down payment is 20%, how much
additional money will the buyer need to provide toward the down payment at
closing?
A.) $32,000
B.) $27,000
C.) $30,000
ANSWER$25,000
,$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
3. If an applicant works 40 hours every week and is paid $13.52 per hour, whatis
the applicant's monthly income?
A.) $2,163.20
B.) $2,343.47
C.) $2,379.52
ANSWER$2,487.68: B.) $2,343.47
$13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343.47
Monthly income
4. The requirement for private mortgage insurance is generally is continued
when the loan-to-value ratio falls below:
A.) 20%
B.) 50%
C.) 80%
ANSWER90%: C.) 80%
,5. Which of the following documents itemizes all settlement costs including
lender charges?
A.) Agreement of sale
B.) HUD-1/closing Disclosure
C.) Form 1003
ANSWERForbearance agreement: B.) HUD-1/closing Disclosure
6. According to the Truth-in-Lending Act (TILA), the term "refinance" appliesto
A.) A change in a payment schedule
B.) A reduction in annual percentage rate
C.) The renewal of a single payment obligation with no change in the original
terms
ANSWERThe satisfaction of an existing obligation and its replacement by a
new obligation
ANSWER The satisfaction of an existing obligation and its replacement by anew
obligation
7. What does a loan originator use to determine the estimated value of a
property based on an analytical comparison of similar property sales?
A.) An appraisal
B.) A market survey
C.) An area survey
ANSWERA Cost-benefit analysis
ANSWERAn appraisal
8. Which of the following methods of disclosure does NOT meet the require-
ments of Equal Credit Opportunity Act (ECOA)?
A.) E-mail
B.) Mailed letter
C.) Telephone
ANSWERFaxed letter: C.) Telephone
9. Term "20 basis points" expressed as a percentage is:
A.) 0.2%
, B.) 0.20%
C.) 2.00%
ANSWER20.00%: B.) 0.20%
one hundredth of one percent, used chiefly in expressing differences of interest
answers (100%) verified
1. A discount point is BEST described as a charge the borrower pays to:
A.) A lender to decrease the interest rate on the mortgage loan
B.) A mortgage broker at the time of application to obtain a favorable rate C.)
The seller as part of the closing costs of a loan
ANSWERA lender to ensure against foreclosure
ANSWERA lender to decrease the interestrate on the mortgage loan
2. A buyer has made an earnest money payment of $5,000. The buyer pays an
additional $2,000 in option money to be credited at closing on property with
sale price of $160,000. If the required down payment is 20%, how much
additional money will the buyer need to provide toward the down payment at
closing?
A.) $32,000
B.) $27,000
C.) $30,000
ANSWER$25,000
,$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
3. If an applicant works 40 hours every week and is paid $13.52 per hour, whatis
the applicant's monthly income?
A.) $2,163.20
B.) $2,343.47
C.) $2,379.52
ANSWER$2,487.68: B.) $2,343.47
$13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343.47
Monthly income
4. The requirement for private mortgage insurance is generally is continued
when the loan-to-value ratio falls below:
A.) 20%
B.) 50%
C.) 80%
ANSWER90%: C.) 80%
,5. Which of the following documents itemizes all settlement costs including
lender charges?
A.) Agreement of sale
B.) HUD-1/closing Disclosure
C.) Form 1003
ANSWERForbearance agreement: B.) HUD-1/closing Disclosure
6. According to the Truth-in-Lending Act (TILA), the term "refinance" appliesto
A.) A change in a payment schedule
B.) A reduction in annual percentage rate
C.) The renewal of a single payment obligation with no change in the original
terms
ANSWERThe satisfaction of an existing obligation and its replacement by a
new obligation
ANSWER The satisfaction of an existing obligation and its replacement by anew
obligation
7. What does a loan originator use to determine the estimated value of a
property based on an analytical comparison of similar property sales?
A.) An appraisal
B.) A market survey
C.) An area survey
ANSWERA Cost-benefit analysis
ANSWERAn appraisal
8. Which of the following methods of disclosure does NOT meet the require-
ments of Equal Credit Opportunity Act (ECOA)?
A.) E-mail
B.) Mailed letter
C.) Telephone
ANSWERFaxed letter: C.) Telephone
9. Term "20 basis points" expressed as a percentage is:
A.) 0.2%
, B.) 0.20%
C.) 2.00%
ANSWER20.00%: B.) 0.20%
one hundredth of one percent, used chiefly in expressing differences of interest
