HRB 1-6 QUIZ FINAL STUDY PAPER 2026
COMPLETE QUESTIONS AND ANSWERS
◉ What is the name of the act that created the NMLS?
1. Frank-Dodd Act
2. SAFE Act
3. RESPA
4. TILA Answer: 2.
◉ In which of the following situations would an MLO license be
required?
1. When an individual performs real estate brokerage activities
2. When an individual is solely involved in the extension of credit for
time shares
3. When an individual is engaged solely as a loan processor or
underwriter
4. When an individual offers or negotiates the terms of a residential
mortgage loan Answer: 4.
◉ The Uniform State Content Test includes all of the following
topics, except:
1. State-specific content
,2. Ethics
3. General mortgage knowledge
4. Federal laws and regulations Answer: 1.
◉ All of the following are actions the Commissioner can take, except:
1. Denying or revoking licenses
2. Imposing fines or penalties
3. Investigating consumer complaints
4. Issuing a unique identifier Answer: 4.
◉ The two most common types of mortgages are fixed rate and
adjustable rate mortgages. Answer: True
◉ An adjustable rate mortgage (ARM) is one where the interest rate
periodically changes over the life of the loan. Answer: True
◉ The three types of interest rate caps on ARMs are called the first
adjustment, subsequent adjustment, and the last adjustment.
Answer: False
First adjustment cap, subsequent adjustment cap, and lifetime
adjustment cap
,◉ The first number in an ARM represents the amount the interest
rate can increase or decrease over the life of the loan. Answer: False
Just for the first adjustment
◉ Hybrid ARMs are a blend of fixed rate and adjustable loans.
Answer: True
◉ The periodic interest rate is the annual interest rate divided by
the number of compounding periods. Answer: True
◉ Construction loans are usually 65% loan to value (LTV) so
borrowers will need to have a 35% down payment. Answer: False
◉ Bridge loans are also called Cross-Collateral loans. Answer: True
◉ Graduated payment mortgages (GPM) have a high initial payment
that gradually lowers over time. Answer: False
◉ A conventional loan can only be a conforming loan. Answer: False
◉ Debt-to-income is a calculation made to determine whether the
borrower can repay the loan they are attempting to receive. Answer:
True
, ◉ To determine a borrower's LTV, you take the loan amount and
multiply it by either the purchase price or the property's appraised
value, whichever is lower. Answer: False
◉ Borrowers must always have at least a 20% down payment to buy
a home. Answer: False
◉ Private mortgage insurance (PMI) is insurance for conventional
loans that protects the borrower from loss. Answer: False
◉ The Department of Housing and Urban Development (HUD)
insures the Federal Housing Administration (FHA) loans. Answer:
True
◉ FHA guidelines say it is acceptable for borrowers to have
defaulted on their student loans and that in this case they are still
eligible for an FHA loan. Answer: False
◉ FHA loans require two types of insurance: UFMIP and annual
mortgage insurance. Answer: True
◉ An appraisal may not always be required with a streamline
mortgage. Answer: True
COMPLETE QUESTIONS AND ANSWERS
◉ What is the name of the act that created the NMLS?
1. Frank-Dodd Act
2. SAFE Act
3. RESPA
4. TILA Answer: 2.
◉ In which of the following situations would an MLO license be
required?
1. When an individual performs real estate brokerage activities
2. When an individual is solely involved in the extension of credit for
time shares
3. When an individual is engaged solely as a loan processor or
underwriter
4. When an individual offers or negotiates the terms of a residential
mortgage loan Answer: 4.
◉ The Uniform State Content Test includes all of the following
topics, except:
1. State-specific content
,2. Ethics
3. General mortgage knowledge
4. Federal laws and regulations Answer: 1.
◉ All of the following are actions the Commissioner can take, except:
1. Denying or revoking licenses
2. Imposing fines or penalties
3. Investigating consumer complaints
4. Issuing a unique identifier Answer: 4.
◉ The two most common types of mortgages are fixed rate and
adjustable rate mortgages. Answer: True
◉ An adjustable rate mortgage (ARM) is one where the interest rate
periodically changes over the life of the loan. Answer: True
◉ The three types of interest rate caps on ARMs are called the first
adjustment, subsequent adjustment, and the last adjustment.
Answer: False
First adjustment cap, subsequent adjustment cap, and lifetime
adjustment cap
,◉ The first number in an ARM represents the amount the interest
rate can increase or decrease over the life of the loan. Answer: False
Just for the first adjustment
◉ Hybrid ARMs are a blend of fixed rate and adjustable loans.
Answer: True
◉ The periodic interest rate is the annual interest rate divided by
the number of compounding periods. Answer: True
◉ Construction loans are usually 65% loan to value (LTV) so
borrowers will need to have a 35% down payment. Answer: False
◉ Bridge loans are also called Cross-Collateral loans. Answer: True
◉ Graduated payment mortgages (GPM) have a high initial payment
that gradually lowers over time. Answer: False
◉ A conventional loan can only be a conforming loan. Answer: False
◉ Debt-to-income is a calculation made to determine whether the
borrower can repay the loan they are attempting to receive. Answer:
True
, ◉ To determine a borrower's LTV, you take the loan amount and
multiply it by either the purchase price or the property's appraised
value, whichever is lower. Answer: False
◉ Borrowers must always have at least a 20% down payment to buy
a home. Answer: False
◉ Private mortgage insurance (PMI) is insurance for conventional
loans that protects the borrower from loss. Answer: False
◉ The Department of Housing and Urban Development (HUD)
insures the Federal Housing Administration (FHA) loans. Answer:
True
◉ FHA guidelines say it is acceptable for borrowers to have
defaulted on their student loans and that in this case they are still
eligible for an FHA loan. Answer: False
◉ FHA loans require two types of insurance: UFMIP and annual
mortgage insurance. Answer: True
◉ An appraisal may not always be required with a streamline
mortgage. Answer: True
