NMLS EXAM QUESTIONS AND ANSWERS | NEW
2025/2026 UPDATE | WITH COMPLETE SOLUTION |
100% CORRECT!!
The preferred debt-to-income ratio for applicants for VA loans is:
A. 35%
B. 43%
C. 50%
D. 41% 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
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 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 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
B. Earnest money
C. Escrow funds
D. Service release premium 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 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 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 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 Answer - B. Declarations
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 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
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 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 Answer - D. Single purpose
2025/2026 UPDATE | WITH COMPLETE SOLUTION |
100% CORRECT!!
The preferred debt-to-income ratio for applicants for VA loans is:
A. 35%
B. 43%
C. 50%
D. 41% 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
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 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 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
B. Earnest money
C. Escrow funds
D. Service release premium 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 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 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 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 Answer - B. Declarations
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 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
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 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 Answer - D. Single purpose
