NMLS Practice Exam Question and
Answers Latest Updates 2026 Graded
A+
What type of loan has a non-refundable funding fee?
VA loan
Under the CFPB, the following groups are identified as types
of consumer and protection laws EXCEPT
Credit Authorization and Security
The primary purpose of Truth in Lending is to:
Disclose the true costs of obtaining credit.
The Rose family owns a home in a semi-rural area, which is
about five years old. Recently announced plans for a new
regional airport will place their home directly in line with a
main runway ending 1 mile before their home. If the airport is
constructed, will this diminish the value of the Rose Home?
Yes, because of economic obsolescence.
The recording of an instrument gives:
Constructive notice
What are discount points or points?
They are a fee paid by the borrower to the lender to reduce the
interest rate on the loan.
A mortgage company makes a number of loans to be
assembled into one package and sold to permanent
investors. This process is an example of interim financing to
the mortgage company and is called:
Blanket financing
Which is not the name of a major credit reporting agency?
Lexis
Placing a subordinate loan behind a conventional first
mortgage to eliminate the need for PMI when the applicant
,has less than 20% to put down on a home purchase is known
as:
Piggyback financing
Payment shock is defined as:
The difference between the borrower's current housing expense
and the proposed housing expense through the loan they're
considering
Which of the following is not a tool to calculate an applicant's
income?
State income tax forms
A Realtor calls an attorney and asks him to represent her
client for free. In turn, the Realtor will refer other paying
clients to that attorney. The attorney agrees. Who, if anyone,
has violated RESPA?
Both the Realtor and the attorney
If fraud is discovered by the servicer, what is LEAST likely to
occur?
The borrower will experience a rate increase
What is required time of notice in days from a creditor for
any subsequent interest rate changes after the initial
change?
Min 60 Max 120
According to the Real Estate Settlement Procedure Act
(RESPA), which of the following statements does not fit the
definition of a mortgage broker?
Involved in transactions including federally related loans
According to RESPA, which action is not prohibited?
A split, portion, or percentage of services actually performed
According to RESPA, which of the following disclosures is
not required to be provided at the time of loan application?
Initial Escrow Statement
RESPA typically applies to all of the following except:
Appraisers
,Within what time frame must AFBA disclosure must be
provided to a client according to RESPA?
At the time of the first referral only
As per the Equal Credit Opportunity Act (ECOA), what is not
permissible scenario in which a creditor can inquire about an
applicant's spouse?
The applicant is relying on the spouse's income as a basis of
repayment
As per ECOA, which statement is not consistent with the
definition of adverse action?
A refusal to increase the amount of credit available to an applicant
who has made an application for an increase
As per ECOA, what is not consistent with the requirements
regarding the denial of an application?
A creditor may not need to describe how a factor adversely
affected the applicant
Which appraisal method subtracts a value for depreciation?
Cost
What is the Fannie Mae appraisal report form?
URAR
What term has the highest priority and is paid off first when a
property is sold?
Property tax
What document is assigned along with the mortgage?
Promissory note
When does the borrower pay the first year of the hazard
insurance premium?
Before or at closing
How many times may a loan originator receive credit for the
same continuing education course?
1
What type of valuation takes into account annual rent as well
as other generated income?
, GIM
What term describes the process of a senior mortgage lien-
holder voluntarily changing into a junior mortgage lien-
holder?
Subordination
Which of the following is an appropriate adjustment in a
market data appraisal?
The comp has a fireplace and the subject doesn't. Add $1,200 to
the comp's estimated value.
Which of the following is NOT a valid component of a
contract?
Down payment
All of the following are true of FHA fixed-rate loans except:
The borrower is only required to carry MIP until the loan's LTV
reaches 78%
A couple has qualified for a $245,600 loan. They are told that
the broker fee will cost two points. What is the dollar amount
of the broker fee?
$4,912.00
An application fee is not included in the APR as long as:
It is assessed as a flat charge
What is the Model State Law?
A model created by the CSBS and the AARMR to guide states in
implementing the legislation required by the SAFE Act
Who is exempt from a mortgage loan originator business
license?
Registered mortgage loan originators, an individual who
negotiates terms on behalf of a friend or a relative, or she lives in,
or a licensed attorney negotiating for a client as an ancillary
matter
Each of the following are key differences found in the FHA
loan program when compared to the conforming,
conventional loan program except:
Answers Latest Updates 2026 Graded
A+
What type of loan has a non-refundable funding fee?
VA loan
Under the CFPB, the following groups are identified as types
of consumer and protection laws EXCEPT
Credit Authorization and Security
The primary purpose of Truth in Lending is to:
Disclose the true costs of obtaining credit.
The Rose family owns a home in a semi-rural area, which is
about five years old. Recently announced plans for a new
regional airport will place their home directly in line with a
main runway ending 1 mile before their home. If the airport is
constructed, will this diminish the value of the Rose Home?
Yes, because of economic obsolescence.
The recording of an instrument gives:
Constructive notice
What are discount points or points?
They are a fee paid by the borrower to the lender to reduce the
interest rate on the loan.
A mortgage company makes a number of loans to be
assembled into one package and sold to permanent
investors. This process is an example of interim financing to
the mortgage company and is called:
Blanket financing
Which is not the name of a major credit reporting agency?
Lexis
Placing a subordinate loan behind a conventional first
mortgage to eliminate the need for PMI when the applicant
,has less than 20% to put down on a home purchase is known
as:
Piggyback financing
Payment shock is defined as:
The difference between the borrower's current housing expense
and the proposed housing expense through the loan they're
considering
Which of the following is not a tool to calculate an applicant's
income?
State income tax forms
A Realtor calls an attorney and asks him to represent her
client for free. In turn, the Realtor will refer other paying
clients to that attorney. The attorney agrees. Who, if anyone,
has violated RESPA?
Both the Realtor and the attorney
If fraud is discovered by the servicer, what is LEAST likely to
occur?
The borrower will experience a rate increase
What is required time of notice in days from a creditor for
any subsequent interest rate changes after the initial
change?
Min 60 Max 120
According to the Real Estate Settlement Procedure Act
(RESPA), which of the following statements does not fit the
definition of a mortgage broker?
Involved in transactions including federally related loans
According to RESPA, which action is not prohibited?
A split, portion, or percentage of services actually performed
According to RESPA, which of the following disclosures is
not required to be provided at the time of loan application?
Initial Escrow Statement
RESPA typically applies to all of the following except:
Appraisers
,Within what time frame must AFBA disclosure must be
provided to a client according to RESPA?
At the time of the first referral only
As per the Equal Credit Opportunity Act (ECOA), what is not
permissible scenario in which a creditor can inquire about an
applicant's spouse?
The applicant is relying on the spouse's income as a basis of
repayment
As per ECOA, which statement is not consistent with the
definition of adverse action?
A refusal to increase the amount of credit available to an applicant
who has made an application for an increase
As per ECOA, what is not consistent with the requirements
regarding the denial of an application?
A creditor may not need to describe how a factor adversely
affected the applicant
Which appraisal method subtracts a value for depreciation?
Cost
What is the Fannie Mae appraisal report form?
URAR
What term has the highest priority and is paid off first when a
property is sold?
Property tax
What document is assigned along with the mortgage?
Promissory note
When does the borrower pay the first year of the hazard
insurance premium?
Before or at closing
How many times may a loan originator receive credit for the
same continuing education course?
1
What type of valuation takes into account annual rent as well
as other generated income?
, GIM
What term describes the process of a senior mortgage lien-
holder voluntarily changing into a junior mortgage lien-
holder?
Subordination
Which of the following is an appropriate adjustment in a
market data appraisal?
The comp has a fireplace and the subject doesn't. Add $1,200 to
the comp's estimated value.
Which of the following is NOT a valid component of a
contract?
Down payment
All of the following are true of FHA fixed-rate loans except:
The borrower is only required to carry MIP until the loan's LTV
reaches 78%
A couple has qualified for a $245,600 loan. They are told that
the broker fee will cost two points. What is the dollar amount
of the broker fee?
$4,912.00
An application fee is not included in the APR as long as:
It is assessed as a flat charge
What is the Model State Law?
A model created by the CSBS and the AARMR to guide states in
implementing the legislation required by the SAFE Act
Who is exempt from a mortgage loan originator business
license?
Registered mortgage loan originators, an individual who
negotiates terms on behalf of a friend or a relative, or she lives in,
or a licensed attorney negotiating for a client as an ancillary
matter
Each of the following are key differences found in the FHA
loan program when compared to the conforming,
conventional loan program except:
