NMLS Test Term 2023-2024 verified from experts
Which of the following would NOT be considered a depository institution? - (correct
answer)Mortgage Broker
The primary difference between a mortgage banker and a mortgage broker is: - (correct
answer)Whether it makes loans or acts as intermediary
A lender which keeps its loans and does not sell them to investors is called a: - (correct
answer)Portfolio Lender
Fannie Mae and Freddie Mac can require a lender to repurchase a loan: - (correct answer)If there is
evidence of mortgage fraud
If the Fed were to buy government securities, the money supply would likely: - (correct
answer)Increase
Under which of the following circumstances would the clerical employee of a MLO be required to be
personally registered or licensed as a mortgage loan originator? - (correct answer)The employee
offers a lower rate to the applicant
A Registered or State Licensed MLO is identified in the NMLS by his or her: - (correct answer)Unique
Identifier
If a State Licensed MLO allows his or her license to expire, that person will have to retest if the
license is not renewed within: - (correct answer)5 years
A Registered Mortgage Loan Originator must complete how many hours of continuing education
courses each year? - (correct answer)0...A State Licensed Originator has to take 8 hours
A person who has failed the national portion of the NMLS exam on the third attempt: - (correct
answer)Must wait 180 days to retake the test
A borrower takes out a fixed rate, fully amortized loan. As each payment is made due, which of the
following statements is correct? - (correct answer)The interest portion of the payment will decrease
and the principal portion will increase
A conventional loan would have what form of backing from the federal government or quasi-
government agencies? - (correct answer)They are not issued, insured or guaranteed by any
government agency
Each of the following statements regarding jumbo loans is correct EXCEPT? - (correct answer)When
jumbo loans are difficult to obtain, fixed rate loans are usually easier to obtain than adjustable rate
loans
Which of the following types of loans would most likely be assumable? - (correct answer)An FHA
Loan (Federal Housing Administration)
What is the down payment requirement for an FHA Loan for a borrower with a credit score at or
above 580? - (correct answer)3.5%...Scores from 500-579 are 10% downpayment
What contribution can a seller make towards the buyer's closing costs when the buyer is obtaining
an FHA Loan? - (correct answer)6% of the purchase of the property (none go to down payment)
In an FHA refinancing loan, what is the amount of the UFMIP? - (correct answer)1%, nut in reality its
1.75%
, NMLS Test Term 2023-2024 verified from experts
What is the Maximum Housing Ratio and Debt-to-Income Ratio, respectively, for FHA loans? -
(correct answer)31% and 43%
What is the Maximum Housing Ratio and Debt-to-Income Ratio, respectively, for VA loans? - (correct
answer)41% and 41%
What is the Maximum Housing Ratio and Debt-to-Income Ratio, respectively, for Conventional
loans? - (correct answer)28% and 36%
What is the Maximum Housing Ratio and Debt-to-Income Ratio, respectively, for Jumbo loans? -
(correct answer)33% and 38-40%
When an applicant for an FHA loan receives tax free income payments of child support payments
from a former spouse, what percentage of that income will be considered for qualification
purposes? - (correct answer)125% (this is an example of being "grossed up")
The most common type of FHA loan is a: - (correct answer)203(b)
A qualified veteran is purchasing a home with a VA loan. He needs to buy down the interest rate.
What is the maximum concession the seller can pay in discount points to buy down the interest
rate? - (correct answer)Up to 4% of the purchase price
The VA funding fee for a first-time borrower on a VA loan is typically: - (correct answer)2.15% of the
loan amount
A buyer is eligible for and applies for a VA loan to purchase a home. The buyer has offered $210,000
for the home, but the VA appraised value is at $200,000. Assuming the seller is not willing to reduce
the price, how may the buyer proceed to purchase the home? - (correct answer)Only if the buyer
pay the $10,000 difference in cash
RHS Loans are offered through the: - (correct answer)USDA
When Private Mortgage Insurance is obtained on a loan, the borrower must put up a down payment
of at least: - (correct answer)3%
The right to cancel Private Mortgage Insurance(PMI) premiums was created by which law? - (correct
answer)The Home Owners Protection Act
Under federal law, the lender is required to cancel the PMI premiums once the loan-to-value ratio
has been paid down to what percentage of the original purchase price? - (correct answer)78%
Adjustable Rate Mortgages were designed to address concerns by lenders about: - (correct
answer)Rising Inflations
The initial interest rate on an adjustable rate loan is 4% below it fully-indexed rate. This rate would
most accuratly be called a: - (correct answer)Teaser Rate because its is more than 3% below the fully
indexed rate
When an interest rate adjustment would result in a monthly interest charge that exceeded the
payment cap, which of the following would result if the borrower took advantage of the payment
cap? - (correct answer)Negative Amortization
What does it mean to "recast" an adjustable rate mortgage? - (correct answer)To recompute the
monthly payments required to fully amortize the loan over the remaining term of the loan.
Which of the following would NOT be considered a depository institution? - (correct
answer)Mortgage Broker
The primary difference between a mortgage banker and a mortgage broker is: - (correct
answer)Whether it makes loans or acts as intermediary
A lender which keeps its loans and does not sell them to investors is called a: - (correct
answer)Portfolio Lender
Fannie Mae and Freddie Mac can require a lender to repurchase a loan: - (correct answer)If there is
evidence of mortgage fraud
If the Fed were to buy government securities, the money supply would likely: - (correct
answer)Increase
Under which of the following circumstances would the clerical employee of a MLO be required to be
personally registered or licensed as a mortgage loan originator? - (correct answer)The employee
offers a lower rate to the applicant
A Registered or State Licensed MLO is identified in the NMLS by his or her: - (correct answer)Unique
Identifier
If a State Licensed MLO allows his or her license to expire, that person will have to retest if the
license is not renewed within: - (correct answer)5 years
A Registered Mortgage Loan Originator must complete how many hours of continuing education
courses each year? - (correct answer)0...A State Licensed Originator has to take 8 hours
A person who has failed the national portion of the NMLS exam on the third attempt: - (correct
answer)Must wait 180 days to retake the test
A borrower takes out a fixed rate, fully amortized loan. As each payment is made due, which of the
following statements is correct? - (correct answer)The interest portion of the payment will decrease
and the principal portion will increase
A conventional loan would have what form of backing from the federal government or quasi-
government agencies? - (correct answer)They are not issued, insured or guaranteed by any
government agency
Each of the following statements regarding jumbo loans is correct EXCEPT? - (correct answer)When
jumbo loans are difficult to obtain, fixed rate loans are usually easier to obtain than adjustable rate
loans
Which of the following types of loans would most likely be assumable? - (correct answer)An FHA
Loan (Federal Housing Administration)
What is the down payment requirement for an FHA Loan for a borrower with a credit score at or
above 580? - (correct answer)3.5%...Scores from 500-579 are 10% downpayment
What contribution can a seller make towards the buyer's closing costs when the buyer is obtaining
an FHA Loan? - (correct answer)6% of the purchase of the property (none go to down payment)
In an FHA refinancing loan, what is the amount of the UFMIP? - (correct answer)1%, nut in reality its
1.75%
, NMLS Test Term 2023-2024 verified from experts
What is the Maximum Housing Ratio and Debt-to-Income Ratio, respectively, for FHA loans? -
(correct answer)31% and 43%
What is the Maximum Housing Ratio and Debt-to-Income Ratio, respectively, for VA loans? - (correct
answer)41% and 41%
What is the Maximum Housing Ratio and Debt-to-Income Ratio, respectively, for Conventional
loans? - (correct answer)28% and 36%
What is the Maximum Housing Ratio and Debt-to-Income Ratio, respectively, for Jumbo loans? -
(correct answer)33% and 38-40%
When an applicant for an FHA loan receives tax free income payments of child support payments
from a former spouse, what percentage of that income will be considered for qualification
purposes? - (correct answer)125% (this is an example of being "grossed up")
The most common type of FHA loan is a: - (correct answer)203(b)
A qualified veteran is purchasing a home with a VA loan. He needs to buy down the interest rate.
What is the maximum concession the seller can pay in discount points to buy down the interest
rate? - (correct answer)Up to 4% of the purchase price
The VA funding fee for a first-time borrower on a VA loan is typically: - (correct answer)2.15% of the
loan amount
A buyer is eligible for and applies for a VA loan to purchase a home. The buyer has offered $210,000
for the home, but the VA appraised value is at $200,000. Assuming the seller is not willing to reduce
the price, how may the buyer proceed to purchase the home? - (correct answer)Only if the buyer
pay the $10,000 difference in cash
RHS Loans are offered through the: - (correct answer)USDA
When Private Mortgage Insurance is obtained on a loan, the borrower must put up a down payment
of at least: - (correct answer)3%
The right to cancel Private Mortgage Insurance(PMI) premiums was created by which law? - (correct
answer)The Home Owners Protection Act
Under federal law, the lender is required to cancel the PMI premiums once the loan-to-value ratio
has been paid down to what percentage of the original purchase price? - (correct answer)78%
Adjustable Rate Mortgages were designed to address concerns by lenders about: - (correct
answer)Rising Inflations
The initial interest rate on an adjustable rate loan is 4% below it fully-indexed rate. This rate would
most accuratly be called a: - (correct answer)Teaser Rate because its is more than 3% below the fully
indexed rate
When an interest rate adjustment would result in a monthly interest charge that exceeded the
payment cap, which of the following would result if the borrower took advantage of the payment
cap? - (correct answer)Negative Amortization
What does it mean to "recast" an adjustable rate mortgage? - (correct answer)To recompute the
monthly payments required to fully amortize the loan over the remaining term of the loan.
