MLO Test Practice questions and (VERIFIED) answers rated A

1. Included in the Loan Estimate, all of the following are part of the finance charge except the: (A) appraisal cost. (B) VA funding fee. (C) per diem interest. (D) origination charges - Answer A) appraisal cost. 2. A buyer has made an earnest money payment of $5,000. The buyer pays an additional $2,000 in option money to be credited at closing on a property with a sale price of $160,000. If the required down payment is 20%, how much additional money will the buyer need to provide toward the down payment at closing? (A) $25,000 (B) $27,000 (C) $30,000 (D) $32,000 - Answer (A) $25,000 $160,000 (sale price) x .20 (down payment percentage) = $32,000; $32,000 - [$5,000 (earnest money) + $2,000 (option money)] = $25,000 3. If an applicant works 40 hours every week and is paid $13.52 per hour, what is the applicant's monthly income? (A) $2,163.20 (B) $2,343.47 (C) $2,379.52 (D) $2,487.68 - Answer (B) $2,343.47 40 hours per week x $13.52 per hour = $540.80 (weekly income); $540.80 x 52 weeks per year = $28,121.60 (yearly income); $28,121.60 / 12 months = $2343.47 (monthly income)4. The requirement for private mortgage insurance (PMI) is generally discontinued when the loan-tovalue ratio falls below: (A) 20%. (B) 50%. (C) 80%. (D) 90%. - Answer (C) 80%. 5. The unique identifier of any personal originating residential loan must be clearly shown on all of the following documents except: (A) business cards. (B) company websites. (C) residential mortgage loan application form. (D) Consumer Financial Protection Bureau (CFPB) special information booklet. - Answer (D) Consumer Financial Protection Bureau (CFPB) special information booklet. 6. According to the Truth-in-Lending Act (TILA), the term "refinance" applies to: (A) a reduction in APR. (B) a change in a payment schedule. (C) the renewal of a single payment obligation with no change in the original terms. (D) the satisfaction of an existing obligation and its replacement by a new obligation - Answer (D) the satisfaction of an existing obligation and its replacement by a new obligation 7. Which of the following documents does a mortgage loan originator use to determine the estimated value of a property based on an analytical comparison of similar property sales? (A) An appraisal (B) An area survey (C) A market survey (D) A cost-benefit analysis - Answer (A) An appraisal