Download NMLS Practice Test Hard Questions and Answers 2025 Graded A+ and more Exams Business Administration in PDF only on Docsity!
NMLS Practice Test Hard Questions and Answers
2025 Graded A+
A discount point is BEST described as a charge the borrower pays to: A.) A lender to decrease the interest rate on the mortgage loan B.) A mortgage broker at the time of application to obtain a favorable rate C.) The seller as part of the closing costs of a loan D.) A lender to ensure against foreclosure - ANSWER-A.) A lender to decrease the interest rate on the mortgage loan 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 property with 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.) $32, B.) $27, C.) $30, D.) $25,000 - ANSWER-D.) $25, $160,000 x .20 (20%) = 32000 - $7,000 = $25, 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. B.) $2,343. C.) $2,379. D.) $2,487.68 - ANSWER-B.) $2,343. $13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343. Monthly income
The requirement for private mortgage insurance is generally is continued when the loan- to-value ratio falls below: A.) 20% B.) 50% C.) 80% D.) 90% - ANSWER-C.) 80%
A.) 0.2%
B.) 0.20%
C.) 2.00%
D.) 20.00% - ANSWER-B.) 0.20%
one hundredth of one percent, used chiefly in expressing differences of interest rates. 0. so 0.01 x20 = 0.
According to the Truth-in-Lending Act (TILA), which if the following fees is EXCLUDED from the calculation of the annual percentage rate? A.) Hazard insurance B.) Wire transfer C.) Prepaid interest D.) Mortgage insurance premiums - ANSWER-A.) Hazard insurance FHA loans are: A.) Partially guaranteed B.) 100% insured C.) Exempt D.) Entitled - ANSWER-A.) Partially guaranteed The late fee for a conventional loan is: A.) 3% of principle and interest B.) 4% of principle and interest C.) 5% of principle and interest D.) 10% of principle and interest - ANSWER-C.) 5% of principle and interest A funding fee if required for a: A.) FHA loan B.) VA loan C.) Jumbo loan D.) Conventional loan - ANSWER-B.) VA loan A Mortgage Insurance Premium is required on: A.) FHA loan B.) VA loan C.) Jumbo
B.) HUD-1/Loan Disclosure C.) Mortgage D.) Note - ANSWER-A.) Deed Which documents is usually NOT recorded A.) Assignment of mortgage B.) Note C.) Deed D.) Mortgage - ANSWER-B.) Note A mortgage title insurance policy is NOT A.) Based on the loan amount B.) Transferable C.) Optional D.) Required by the lender - ANSWER-C.) Optional Which parties sign the deed? A.) Grantor, grantee and two witnesses B.) Grantor and two witnesses C.) Grantee and two witnesses D.) Grantee only - ANSWER-B.) Grantor and two witnesses When the mortgagor and the mortgagee title insurance policies are issued at the same time, this is known as: A.) Simultaneous issue B.) Concurrent issue C.) Subsequent issue D.) Dual issue - ANSWER-A.) Simultaneous issue A shrubbery hedge is one example of an: A.)
Encumbrance B.) Easement C.) Entitlement D.) Acceptable title impediment - ANSWER-D.) Acceptable title impediment A loan on personal property only known as: A.) Package mortgage B.) Chattel mortgage C.) Furnishing mortgage D.) Exotic mortgage - ANSWER-B.) Chattel mortgage
D.) Patriot Act - ANSWER-C.) Equal Credit Opportunity Act Which law prohibits discrimination by lenders? A.) Truth-in-Lending B.) Real Estate Settlement Procedures Act C.) Equal Credit Opportunity Act D.) Patriot Act - ANSWER-C.) Equal Credit Opportunity Act A property sold for $200,000 and was appraised at $180,000. The borrower received a loan for $150,000. What is the loan-to-value?
A.) 75%
B.) 83.3%
C.) 90%
D.) 92.4$ - ANSWER-B.) 83.3%
How many days does a lender have to send an adverse action notice? A.) 5 B.) 10 C.) 30 D.) 60 - ANSWER-C.) 30 The GFE/Loan Estimate must be mailed or given to the borrower within how many days after rceiving the signed application? A.) 3 business days B.) 7 business days C.) 10 business days D.) 30 business days - ANSWER-A.) 3 business days The enforcement of a lien is known as: A.) Closing B.) Foreclosure C.) Warranty inspection D.) Police Action - ANSWER-B.) Foreclosure The minimum percentage of ownership in a related service required a conflict of interest disclosure? A.) 5% B.) 10% C.) 25% D.) 50% - ANSWER-B.) 10% What minimum percentage o ownership qualifies an individual as self-employed?
B.) 2 years W2's C.) Profit and Loss statement D.) Balance sheet - ANSWER-B.) 2 years W2's How may months must be left on an automobile lease to include it as a debt? A.) 2 months B.) 5 months C.) 10 months D.) It is always included - ANSWER-D.) It is always included Which law defines the right of rescission? A.) Truth-in-Lending B.) Real Estate Settlement Procedures Act C.) Equal Credit Opportunity Act D.) Patriot Act - ANSWER-A.) Truth-in-Lending Investopedia A right of rescission is a right under American federal law set forth by the Truth in Lending Act (TILA) that gives a borrower the right to cancel a home equity loan or line of credit with a new lender, or to cancel a refinance transaction done with another lender other than the current mortgagee within three days of closing. The right is provided on a no-questions-asked basis, and the lender must give up its claim to the property and refund all fees within 20 days of exercising of the right of rescission. How long after the application date must social security payments continue to be received in order to count as income? A.) 3 months B.) 10 months C.) 2 years D.) 3 years - ANSWER-D.) 3 years Credit reports on new construction are good for how many days?
A.) 90 days B.) 120 days C.) 180 days D.) 225 days - ANSWER-B.) 120 days Which clause in a mortgage allows a lender to increase the interest rate? A.) Defeasance B.) Escalation C.) Acceleration
B.) FEMA
C.) FHA
D.) VA - ANSWER-B.) FEMA
A VA appraisal is known as a: A.) CRV B.) Veteran's appraisal report C.) Fannie Mae 1025 D.) AVA - ANSWER-A.) CRV
Fannie Mae's automated underwriting system is known as: A.) Fannie Mannie B.) Software Helper C.) Desktop Underwriter D.) Loan Prospector - ANSWER-C.) Desktop Underwriter There are 10 days left in the month. The purchase price is $150,000, the loan amount is $100,000 and the interest rate is 6%. How much mortgage interest must the borrower pay at closing? A.) $164. B.) $250. C.) $440. D.) $2,739.73 - ANSWER-A.) $164. 100,000 x .06 (6%) = 6000 / 365 days = 16.438 x 10days = $164. Private Mortgages Insurance is automatically canceled when the loan-to-value reaches what level? A.) 55% B.) 70% C.) 78% D.) 80% - ANSWER-C.) 78% Which types of loans are meant for rural areas? A.) VA B.) FHA C.) USDA D.) RAL - ANSWER-C.) USDA The purchase price of a home is $200,000 and the loan amount is $180,000. The
The key to this question is POINTS last time i accidentally added the 6% interest. There is 2 points so $180,000 x .02 = $3, If the Gross Rent Multiplier (GRM) decreases, the property value: A.) Increases B.) Decreases C.) Does not change D.) Can increase or decrease - ANSWER-B.) Decreases What is the maximum allowable amount of VA seller concessions? A.) 2% B.) 3% C.) 4% D.) 5% - ANSWER-C.) 4% When a property increases in value for any reason this is known as: A.) Acceleration B.) Appreciation C.) Accumulation D.) Acclimation - ANSWER-B.) Appreciation 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 - 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. Which of the following is incorrect regarding an adjustable-rate mortgage?
A.) The index is fixed B.) The margin is fixed C.) There are rate caps on both the adjustment period and the life of the loan D.) LIBOR is a typical index used - ANSWER-A.) The index is fixed Which of the following is NOT a fully amortized loan? A.) Term mortgage
