NMLS PRACTICE TEST HARD
QUESTIONS AND CORRECT
ANSWERS
There are 10 days left in the month. The purchase price is $150,000, the loan amount is $100,000
and the interest rate is 6%. How much mortgage interest must the borrower pay at closing?
A.) $164.38
B.) $250.00
C.) $440.20
D.) $2,739.73 ANSW✅✅A.) $164.38
100,000 x .06 (6%) = days = 16.438 x 10days = $164.38
Private Mortgages Insurance is automatically canceled when the loan-to-value reaches what level?
A.) 55%
B.) 70%
C.) 78%
D.) 80% ANSW✅✅C.) 78%
Which types of loans are meant for rural areas?
A.) VA
B.) FHA
C.) USDA
D.) RAL ANSW✅✅C.) USDA
,The purchase price of a home is $200,000 and the loan amount is $180,000. The borrower pays 6%
interest with 1 discount point and 1 origination point. What is the cost of the points?
A.) $1,800
B.) $2,000
C.) $3,600
D.) $4,000 ANSW✅✅C.) $3,600
The key to this question is POINTS last time i accidentally added the 6% interest. There is 2 points so
$180,000 x .02 = $3,600
If the Gross Rent Multiplier (GRM) decreases, the property value:
A.) Increases
B.) Decreases
C.) Does not change
D.) Can increase or decrease ANSW✅✅B.) Decreases
What is the maximum allowable amount of VA seller concessions?
A.) 2%
B.) 3%
C.) 4%
D.) 5% ANSW✅✅C.) 4%
When a property increases in value for any reason this is known as:
A.) Acceleration
B.) Appreciation
C.) Accumulation
, D.) Acclimation ANSW✅✅B.) Appreciation
Which appraisal approach is most suitable for an office building?
A.) Sales comparison approach
B.) Cost approach
C.) Income capitalization approach
D.) Tenant collection approach ANSW✅✅C.) Income capitalization approach
Investopedia
The income approach is a real estate appraisal method that allows investors to estimate the value of
a property by taking the net operating income of the rent collected and dividing it by the
capitalization rate.
Which of the following is incorrect regarding an adjustable-rate mortgage?
A.) The index is fixed
B.) The margin is fixed
C.) There are rate caps on both the adjustment period and the life of the loan
D.) LIBOR is a typical index used ANSW✅✅A.) The index is fixed
Which of the following is NOT a fully amortized loan?
A.) Term mortgage
B.) Fixed-rate mortgage
C.) Adjustable-rate mortgage
D.) Bi-weekly mortgage ANSW✅✅A.) Term mortgage
Which of the following is a negatively amortizing loan?
A.) Reverse mortgage
QUESTIONS AND CORRECT
ANSWERS
There are 10 days left in the month. The purchase price is $150,000, the loan amount is $100,000
and the interest rate is 6%. How much mortgage interest must the borrower pay at closing?
A.) $164.38
B.) $250.00
C.) $440.20
D.) $2,739.73 ANSW✅✅A.) $164.38
100,000 x .06 (6%) = days = 16.438 x 10days = $164.38
Private Mortgages Insurance is automatically canceled when the loan-to-value reaches what level?
A.) 55%
B.) 70%
C.) 78%
D.) 80% ANSW✅✅C.) 78%
Which types of loans are meant for rural areas?
A.) VA
B.) FHA
C.) USDA
D.) RAL ANSW✅✅C.) USDA
,The purchase price of a home is $200,000 and the loan amount is $180,000. The borrower pays 6%
interest with 1 discount point and 1 origination point. What is the cost of the points?
A.) $1,800
B.) $2,000
C.) $3,600
D.) $4,000 ANSW✅✅C.) $3,600
The key to this question is POINTS last time i accidentally added the 6% interest. There is 2 points so
$180,000 x .02 = $3,600
If the Gross Rent Multiplier (GRM) decreases, the property value:
A.) Increases
B.) Decreases
C.) Does not change
D.) Can increase or decrease ANSW✅✅B.) Decreases
What is the maximum allowable amount of VA seller concessions?
A.) 2%
B.) 3%
C.) 4%
D.) 5% ANSW✅✅C.) 4%
When a property increases in value for any reason this is known as:
A.) Acceleration
B.) Appreciation
C.) Accumulation
, D.) Acclimation ANSW✅✅B.) Appreciation
Which appraisal approach is most suitable for an office building?
A.) Sales comparison approach
B.) Cost approach
C.) Income capitalization approach
D.) Tenant collection approach ANSW✅✅C.) Income capitalization approach
Investopedia
The income approach is a real estate appraisal method that allows investors to estimate the value of
a property by taking the net operating income of the rent collected and dividing it by the
capitalization rate.
Which of the following is incorrect regarding an adjustable-rate mortgage?
A.) The index is fixed
B.) The margin is fixed
C.) There are rate caps on both the adjustment period and the life of the loan
D.) LIBOR is a typical index used ANSW✅✅A.) The index is fixed
Which of the following is NOT a fully amortized loan?
A.) Term mortgage
B.) Fixed-rate mortgage
C.) Adjustable-rate mortgage
D.) Bi-weekly mortgage ANSW✅✅A.) Term mortgage
Which of the following is a negatively amortizing loan?
A.) Reverse mortgage
