NMLS Exam Questions
The preferred debt-to-income ratio for applicants for VA loans is:
A. 35%
B. 43%
C. 50%
D. 41% - ✔✔ correct answer D. 41%
When would a license be suspended without a hearing?
A. If a licensee fails to renew
B. If a licensee fails to request a hearing with the state regulator
C. If a licensee has failed to complete pre-licensing requirements
D. If a licensee has already executed a right to a hearing for a previous violation - ✔✔ correct answer
B. If a licensee fails to request a hearing with the state regulator
After a borrower allows the assumption of his or her VA loan, he or she may use his or her VA
privilege again only after:
A. Five years have passed
B. The home is sold to a new owner
C. The original VA loan is satisfied
D. The original VA loan is moved from his or her name into the name of the assuming borrower - ✔✔
correct answer C. The original VA loan is satisfied
In order to qualify for an adjustable-rate mortgage, a consumer must be able to show that he or she
can:
A. Make regularly scheduled payments that are calculated using the loan's introductory rate
B. Make amortizing payments that are calculated using the fully indexed rate for the ARM
C. Make amortizing payments that are calculated using the loan's rate after the first interest rate
adjustment occurs
D. Make regularly scheduled payments that are calculated using the fixed interest rate for which the
consumer would be eligible - ✔✔ correct answer B. Make amortizing payments that are calculated
using the fully indexed rate for the ARM
Money paid by a buyer to a seller at the time of entering into a contract to indicate intent and ability
to carry out the contract is called:
A. Down payment
,NMLS Exam Questions
B. Earnest money
C. Escrow funds
D. Service release premium - ✔✔ correct answer B. Earnest money
The Pois have just closed on their mortgage loan at a formal settlement meeting. What is mortgage
loan originator Leilani Luau's responsibility after loan closing?
A. She must provide any required re-disclosures
B. None; Leilani's tasks are complete
C. She must provide another set of disclosures, showing final costs and expenses
D. She must record the transaction with the county recorder - ✔✔ correct answer B. None; Leilani's
tasks are complete
In order for a small creditor to originate a balloon payment qualified mortgage, the small creditor
must hold the loan in its portfolio for:
A. Twelve months
B. Three years
C. Two years
D. Five years - ✔✔ correct answer B. Three years
When a seller provides all or part of the financing for the borrower in order to finance a purchase
transaction, it is known as:
A. For sale by owner (FSBO)
B. Seller carry-back
C. Seller concessions
D. Seller self-financed - ✔✔ correct answer B. Seller carry-back
Which section of the URLA contains questions which, depending on the applicant's answer, could
result in immediate rejection of the application?
A. Information for Government Monitoring Purposes
B. Declarations
C. Details of the Transaction
D. Acknowledgement and Agreement - ✔✔ correct answer B. Declarations
, NMLS Exam Questions
With what type of loan do payments, including principal and interest, remain constant throughout
the life of the loan?
A. A balloon loan, as long as the maturity date is beyond ten years
B. An ARM with a conversion option
C. Fixed rate
D. An FHA loan - ✔✔ correct answer C. Fixed rate
If a financial institution intends to share consumer information with nonaffiliated third parties, an
initial privacy notice is due to a consumer at what point?
A. Within seven business days of a customer providing nonpublic personal information sufficient to
pull a credit report
B. Within three business days of initial contact between the consumer and the financial institution
C. No later than three business days prior to settlement
D. No later than the time at which a customer relationship is established - ✔✔ correct answer D. No
later than the time at which a customer relationship is established
In January of 2020, Wella and Kip agreed to purchase a home at a purchase price of $546,300. They
would like to hold onto as much of their savings as they can, but they have chosen to make a down
payment sufficient enough to qualify for a conforming loan. What is the minimum down payment
they can make to reach the conforming loan limit but still retain savings?
A. $47,900
B. $35,900
C. $95,800
D. $54,900 - ✔✔ correct answer B. $35,900
Which of the following is the least-expensive type of reverse mortgage?
A. HECM
B. Proprietary mortgage
C. Non-recourse
D. Single purpose - ✔✔ correct answer D. Single purpose
A single-purpose reverse mortgage is a low-cost loan offered to low-income borrowers by state and
local agencies or non-profit organizations. They are typically made for purposes such as payment of
property taxes or payment for home improvements.
The preferred debt-to-income ratio for applicants for VA loans is:
A. 35%
B. 43%
C. 50%
D. 41% - ✔✔ correct answer D. 41%
When would a license be suspended without a hearing?
A. If a licensee fails to renew
B. If a licensee fails to request a hearing with the state regulator
C. If a licensee has failed to complete pre-licensing requirements
D. If a licensee has already executed a right to a hearing for a previous violation - ✔✔ correct answer
B. If a licensee fails to request a hearing with the state regulator
After a borrower allows the assumption of his or her VA loan, he or she may use his or her VA
privilege again only after:
A. Five years have passed
B. The home is sold to a new owner
C. The original VA loan is satisfied
D. The original VA loan is moved from his or her name into the name of the assuming borrower - ✔✔
correct answer C. The original VA loan is satisfied
In order to qualify for an adjustable-rate mortgage, a consumer must be able to show that he or she
can:
A. Make regularly scheduled payments that are calculated using the loan's introductory rate
B. Make amortizing payments that are calculated using the fully indexed rate for the ARM
C. Make amortizing payments that are calculated using the loan's rate after the first interest rate
adjustment occurs
D. Make regularly scheduled payments that are calculated using the fixed interest rate for which the
consumer would be eligible - ✔✔ correct answer B. Make amortizing payments that are calculated
using the fully indexed rate for the ARM
Money paid by a buyer to a seller at the time of entering into a contract to indicate intent and ability
to carry out the contract is called:
A. Down payment
,NMLS Exam Questions
B. Earnest money
C. Escrow funds
D. Service release premium - ✔✔ correct answer B. Earnest money
The Pois have just closed on their mortgage loan at a formal settlement meeting. What is mortgage
loan originator Leilani Luau's responsibility after loan closing?
A. She must provide any required re-disclosures
B. None; Leilani's tasks are complete
C. She must provide another set of disclosures, showing final costs and expenses
D. She must record the transaction with the county recorder - ✔✔ correct answer B. None; Leilani's
tasks are complete
In order for a small creditor to originate a balloon payment qualified mortgage, the small creditor
must hold the loan in its portfolio for:
A. Twelve months
B. Three years
C. Two years
D. Five years - ✔✔ correct answer B. Three years
When a seller provides all or part of the financing for the borrower in order to finance a purchase
transaction, it is known as:
A. For sale by owner (FSBO)
B. Seller carry-back
C. Seller concessions
D. Seller self-financed - ✔✔ correct answer B. Seller carry-back
Which section of the URLA contains questions which, depending on the applicant's answer, could
result in immediate rejection of the application?
A. Information for Government Monitoring Purposes
B. Declarations
C. Details of the Transaction
D. Acknowledgement and Agreement - ✔✔ correct answer B. Declarations
, NMLS Exam Questions
With what type of loan do payments, including principal and interest, remain constant throughout
the life of the loan?
A. A balloon loan, as long as the maturity date is beyond ten years
B. An ARM with a conversion option
C. Fixed rate
D. An FHA loan - ✔✔ correct answer C. Fixed rate
If a financial institution intends to share consumer information with nonaffiliated third parties, an
initial privacy notice is due to a consumer at what point?
A. Within seven business days of a customer providing nonpublic personal information sufficient to
pull a credit report
B. Within three business days of initial contact between the consumer and the financial institution
C. No later than three business days prior to settlement
D. No later than the time at which a customer relationship is established - ✔✔ correct answer D. No
later than the time at which a customer relationship is established
In January of 2020, Wella and Kip agreed to purchase a home at a purchase price of $546,300. They
would like to hold onto as much of their savings as they can, but they have chosen to make a down
payment sufficient enough to qualify for a conforming loan. What is the minimum down payment
they can make to reach the conforming loan limit but still retain savings?
A. $47,900
B. $35,900
C. $95,800
D. $54,900 - ✔✔ correct answer B. $35,900
Which of the following is the least-expensive type of reverse mortgage?
A. HECM
B. Proprietary mortgage
C. Non-recourse
D. Single purpose - ✔✔ correct answer D. Single purpose
A single-purpose reverse mortgage is a low-cost loan offered to low-income borrowers by state and
local agencies or non-profit organizations. They are typically made for purposes such as payment of
property taxes or payment for home improvements.
