NMLS SAFE MLO EXAM PREP |ACTUAL QUESTIONS
AND VERIFIED ANSWERS |LATEST 2026/2027
UPDATE|GRADED A+
Question 1
When utilizing a temporary buydown to lower the interest rate on a FHA loan, which of the
following are correct
A. The borrower qualified at the note rate
B. The borrower qualified at the buydown rate
C. The rate cannot be more than 2% below the note rate
D. Seller or builder can pay the discount points to buydown the rate
ANSWER
B. The borrower qualified at the buydown rate
Question 2
When an ARM has rate caps of 5/2/6, the 6 refers to what?
A. The maximum rate increase at the initial adjustment
B. The start rate for the loan
C. The maximum the rate can increase over the life of the loan
D. The rate maximum the rate can decrease over the life of the loan
ANSWER
C. The maximum the rate can increase over the life of the loan
Question 3
All of the following are violations of the Fair Housing Act EXCEPT
1
@THE STUDY VAULT
,A. Age
B. National Origin
C. Disability
D.Religion
ANSWER
A. Age
Question 4
Advertised term that requires additional disclosures
ANSWER
Trigger Term
Question 5
Claim against property held by one who is not the legal owner
ANSWER
Encrumbrance
Question 6
An advertisement must be presented "clearly and conspicuously" to keep from being
deceptive, unfair, or otherwise violate a Commission rule
ANSWER
Advertising Disclosure
2
@THE STUDY VAULT
,Question 7
Extenuating circumstances such as "bona fide personal financial emergency
ANSWER
Waving Right of Rescission
Question 8
Right that borrowers have to cancel a loan or line of credit with a lender within three days of
closing
ANSWER
Right of Rescission
Question 9
When creditors office is open to the public, a calendar working day except Sunday or a
federal holiday
ANSWER
Business Day
Question 10
Financial information used for purposes of obtaining an extension of credit
ANSWER
Application
Question 11
3
@THE STUDY VAULT
, Mission is to promote consumer protection and eliminate and prevent anticompetitive
business practices
ANSWER
FTC
Federal Trade Commission
Question 12
The act of making new information known
ANSWER
Disclosure
Question 13
Regulatory agency charged with overseeing financial products and services offered to
consumers
ANSWER
CFPB
Consumer Financial Protection Bureau
Question 14
Enacted 1968 promotes the informed use of consumer credit by requiring disclosures about
terms and costs and standardizes the manner in which costs with borrowing are calculated
and disclosed
ANSWER
TILA
Truth in Lending Act
4
@THE STUDY VAULT
AND VERIFIED ANSWERS |LATEST 2026/2027
UPDATE|GRADED A+
Question 1
When utilizing a temporary buydown to lower the interest rate on a FHA loan, which of the
following are correct
A. The borrower qualified at the note rate
B. The borrower qualified at the buydown rate
C. The rate cannot be more than 2% below the note rate
D. Seller or builder can pay the discount points to buydown the rate
ANSWER
B. The borrower qualified at the buydown rate
Question 2
When an ARM has rate caps of 5/2/6, the 6 refers to what?
A. The maximum rate increase at the initial adjustment
B. The start rate for the loan
C. The maximum the rate can increase over the life of the loan
D. The rate maximum the rate can decrease over the life of the loan
ANSWER
C. The maximum the rate can increase over the life of the loan
Question 3
All of the following are violations of the Fair Housing Act EXCEPT
1
@THE STUDY VAULT
,A. Age
B. National Origin
C. Disability
D.Religion
ANSWER
A. Age
Question 4
Advertised term that requires additional disclosures
ANSWER
Trigger Term
Question 5
Claim against property held by one who is not the legal owner
ANSWER
Encrumbrance
Question 6
An advertisement must be presented "clearly and conspicuously" to keep from being
deceptive, unfair, or otherwise violate a Commission rule
ANSWER
Advertising Disclosure
2
@THE STUDY VAULT
,Question 7
Extenuating circumstances such as "bona fide personal financial emergency
ANSWER
Waving Right of Rescission
Question 8
Right that borrowers have to cancel a loan or line of credit with a lender within three days of
closing
ANSWER
Right of Rescission
Question 9
When creditors office is open to the public, a calendar working day except Sunday or a
federal holiday
ANSWER
Business Day
Question 10
Financial information used for purposes of obtaining an extension of credit
ANSWER
Application
Question 11
3
@THE STUDY VAULT
, Mission is to promote consumer protection and eliminate and prevent anticompetitive
business practices
ANSWER
FTC
Federal Trade Commission
Question 12
The act of making new information known
ANSWER
Disclosure
Question 13
Regulatory agency charged with overseeing financial products and services offered to
consumers
ANSWER
CFPB
Consumer Financial Protection Bureau
Question 14
Enacted 1968 promotes the informed use of consumer credit by requiring disclosures about
terms and costs and standardizes the manner in which costs with borrowing are calculated
and disclosed
ANSWER
TILA
Truth in Lending Act
4
@THE STUDY VAULT
