NMLS License Practice Test Questions and Answers |Fall
2025/2026 Update | 100% Correct
Question 1
What clause in a mortgage allows the lender to call the entire loan balance due?
A.) Defeasance
B.) Escalation
C.) Acceleration
D.) Exculpatory
Correct Answer
C.) Acceleration
Question 2
Who should applicants contact if they have questions about their credit score or credit information?
A.) Credit reporting agency
B.) Lender
C.) Mortgage broker
D.) Attorney
Correct Answer
A.) Credit reporting agency
Page 1 of 50
,Question 3
A loan closes on May 14. When is the first mortgage payment due?
A.) May 15
B.) June 1
C.) June 15
D.) July 1
Correct Answer
D.) July 1
45 days
Question 4
A mortgage is:
A.) The document that conveys title
B.) The pledge of the property as collateral for the loan
C.) The borrower's IOU
D.) The document that transfers contractual rights to another investor
Correct Answer
D.) The document that transfers contractual rights to another investor
Page 2 of 50
,Question 5
When title is transferred and the buyer assumes no liability for the note, this type of transference is known as:
A.) Free and clear
B.) Subject to the mortgage
C.) Assumption
D.) Novation
Correct Answer
B.) Subject to the mortgage
Question 6
How many days does a lender have to send an adverse action notice?
A.) 5
B.) 10
C.) 30
D.) 60
Correct Answer
C.) 30
Page 3 of 50
, Question 7
Which clause in a mortgage allows a lender to increase the interest rate?
A.) Defeasance
B.) Escalation
C.) Acceleration
D.) Exculpatory
Correct Answer
B.) Escalation
Question 8
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
Correct Answer
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.
Page 4 of 50
2025/2026 Update | 100% Correct
Question 1
What clause in a mortgage allows the lender to call the entire loan balance due?
A.) Defeasance
B.) Escalation
C.) Acceleration
D.) Exculpatory
Correct Answer
C.) Acceleration
Question 2
Who should applicants contact if they have questions about their credit score or credit information?
A.) Credit reporting agency
B.) Lender
C.) Mortgage broker
D.) Attorney
Correct Answer
A.) Credit reporting agency
Page 1 of 50
,Question 3
A loan closes on May 14. When is the first mortgage payment due?
A.) May 15
B.) June 1
C.) June 15
D.) July 1
Correct Answer
D.) July 1
45 days
Question 4
A mortgage is:
A.) The document that conveys title
B.) The pledge of the property as collateral for the loan
C.) The borrower's IOU
D.) The document that transfers contractual rights to another investor
Correct Answer
D.) The document that transfers contractual rights to another investor
Page 2 of 50
,Question 5
When title is transferred and the buyer assumes no liability for the note, this type of transference is known as:
A.) Free and clear
B.) Subject to the mortgage
C.) Assumption
D.) Novation
Correct Answer
B.) Subject to the mortgage
Question 6
How many days does a lender have to send an adverse action notice?
A.) 5
B.) 10
C.) 30
D.) 60
Correct Answer
C.) 30
Page 3 of 50
, Question 7
Which clause in a mortgage allows a lender to increase the interest rate?
A.) Defeasance
B.) Escalation
C.) Acceleration
D.) Exculpatory
Correct Answer
B.) Escalation
Question 8
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
Correct Answer
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.
Page 4 of 50
