NMLS PRACTICE TEST HARD QUESTIONS WITH ALL SOLUTIONS

NMLS PRACTICE TEST HARD
QUESTIONS WITH ALL SOLUTIONS




A discount point is BEST described as a charge the borrower pays to:
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A.) A lender to decrease the interest rate on the mortgage loan
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B.) A mortgage broker at the time of application to obtain a favorable rate
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C.) The seller as part of the closing costs of a loan
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D.) A lender to ensure against foreclosure - correct answer- A.) A lender to
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decrease the interest rate on the mortgage loan
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A buyer has made an earnest money payment of $5,000. The buyer pays an
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additional $2,000 in option money to be credited at closing on property with sale
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price of $160,000. If the required down payment is 20%, how much additional
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money will the buyer need to provide toward the down payment at closing?
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A.) $32,000
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B.) $27,000
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C.) $30,000
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D.) $25,000 - correct answer- D.) $25,000
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$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
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If an applicant works 40 hours every week and is paid $13.52 per hour, what is the
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Vapplicant's monthly income? V V




A.) $2,163.20
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B.) $2,343.47
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C.) $2,379.52
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D.) $2,487.68 - correct answer- B.) $2,343.47
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,$13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343.47
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Monthly income
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The requirement for private mortgage insurance is generally is continued when the
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loan-to-value ratio falls below:
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A.) 20%
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B.) 50%
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C.) 80%
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D.) 90% - correct answer- C.) 80%
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Which of the following documents itemizes all settlement costs including lender
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charges?
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A.) Agreement of sale
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B.) HUD-1/closing Disclosure
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C.) Form 1003
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D.) Forbearance agreement - correct answer- B.) HUD-1/closing Disclosure
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According to the Truth-in-Lending Act (TILA), the term "refinance" applies to
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A.) A change in a payment schedule
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B.) A reduction in annual percentage rate
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C.) The renewal of a single payment obligation with no change in the original terms
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D.) The satisfaction of an existing obligation and its replacement by a new
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obligation - correct answer- D.) The satisfaction of an existing obligation and its
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replacement by a new obligation
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What does a loan originator use to determine the estimated value of a property
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based on an analytical comparison of similar property sales?
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A.) An appraisal
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B.) A market survey
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C.) An area survey
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D.) A Cost-benefit analysis - correct answer- A.) An appraisal
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Which of the following methods of disclosure does NOT meet the requirements of
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Equal Credit Opportunity Act (ECOA)?
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A.) E-mail
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B.) Mailed letter
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C.) Telephone
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D.) Faxed letter - correct answer- C.) Telephone
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Term "20 basis points" expressed as a percentage is:
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A.) 0.2%
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B.) 0.20%
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C.) 2.00%
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D.) 20.00% - correct answer- B.) 0.20%
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, one hundredth of one percent, used chiefly in expressing differences of interest
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rates. 0.01
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so 0.01 x20 = 0.2
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According to the Truth-in-Lending Act (TILA), which if the following fees is
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EXCLUDED from the calculation of the annual percentage rate?
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A.) Hazard insurance
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B.) Wire transfer
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C.) Prepaid interest
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D.) Mortgage insurance premiums - correct answer- A.) Hazard insurance
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FHA loans are: V V




A.) Partially guaranteed
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B.) 100% insured
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C.) Exempt V


D.) Entitled - correct answer- A.) Partially guaranteed
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The late fee for a conventional loan is:
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A.) 3% of principle and interest
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B.) 4% of principle and interest
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C.) 5% of principle and interest
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D.) 10% of principle and interest - correct answer- C.) 5% of principle and interest
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A funding fee if required for a:
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A.) FHA loanV V


B.) VA loan V V


C.) Jumbo loan
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D.) Conventional loan - correct answer- B.) VA loan
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A Mortgage Insurance Premium is required on:
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A.) FHA loanV V


B.) VA loan V V


C.) Jumbo loan
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D.) Conventional loan - correct answer- A.) FHA loan
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The mortgagee is the:
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A.) BorrowerV


B.) Lender V


C.) Closing agent
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D.) Mortgage broker - correct answer- B.) Lender
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The borrower does NOT sign which document:
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