NMLS Practice Test Hard Questions
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 - ANS-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.) $32,000
B.) $27,000
C.) $30,000
D.) $25,000 - ANS-D.) $25,000
$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
If an applicant works 40 hours every week and is paid $13.52 per hour, what is the
applicant's monthly income?
A.) $2,163.20
B.) $2,343.47
C.) $2,379.52
D.) $2,487.68 - ANS-B.) $2,343.47
$13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343.47
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% - ANS-C.) 80%
Which of the following documents itemizes all settlement costs including lender
charges?
A.) Agreement of sale
B.) HUD-1/closing Disclosure
C.) Form 1003
D.) Forbearance agreement - ANS-B.) HUD-1/closing Disclosure
According to the Truth-in-Lending Act (TILA), the term "refinance" applies to
A.) A change in a payment schedule
B.) A reduction in annual percentage rate
C.) The renewal of a single payment obligation with no change in the original terms
D.) The satisfaction of an existing obligation and its replacement by a new obligation -
ANS-D.) The satisfaction of an existing obligation and its replacement by a new
obligation
What does a loan originator use to determine the estimated value of a property based
on an analytical comparison of similar property sales?
A.) An appraisal
B.) A market survey
C.) An area survey
D.) A Cost-benefit analysis - ANS-A.) An appraisal
Which of the following methods of disclosure does NOT meet the requirements of Equal
Credit Opportunity Act (ECOA)?
A.) E-mail
B.) Mailed letter
C.) Telephone
D.) Faxed letter - ANS-C.) Telephone
Term "20 basis points" expressed as a percentage is:
, A.) 0.2%
B.) 0.20%
C.) 2.00%
D.) 20.00% - ANS-B.) 0.20%
one hundredth of one percent, used chiefly in expressing differences of interest rates.
0.01
so 0.01 x20 = 0.2
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 - ANS-A.) Hazard insurance
FHA loans are:
A.) Partially guaranteed
B.) 100% insured
C.) Exempt
D.) Entitled - ANS-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 - ANS-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 - ANS-B.) VA loan
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 - ANS-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.) $32,000
B.) $27,000
C.) $30,000
D.) $25,000 - ANS-D.) $25,000
$160,000 x .20 (20%) = 32000 - $7,000 = $25,000
If an applicant works 40 hours every week and is paid $13.52 per hour, what is the
applicant's monthly income?
A.) $2,163.20
B.) $2,343.47
C.) $2,379.52
D.) $2,487.68 - ANS-B.) $2,343.47
$13.52x 40 hours = $540.8 x 52 weeks = $28,121.6 annually /12month = $2,343.47
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% - ANS-C.) 80%
Which of the following documents itemizes all settlement costs including lender
charges?
A.) Agreement of sale
B.) HUD-1/closing Disclosure
C.) Form 1003
D.) Forbearance agreement - ANS-B.) HUD-1/closing Disclosure
According to the Truth-in-Lending Act (TILA), the term "refinance" applies to
A.) A change in a payment schedule
B.) A reduction in annual percentage rate
C.) The renewal of a single payment obligation with no change in the original terms
D.) The satisfaction of an existing obligation and its replacement by a new obligation -
ANS-D.) The satisfaction of an existing obligation and its replacement by a new
obligation
What does a loan originator use to determine the estimated value of a property based
on an analytical comparison of similar property sales?
A.) An appraisal
B.) A market survey
C.) An area survey
D.) A Cost-benefit analysis - ANS-A.) An appraisal
Which of the following methods of disclosure does NOT meet the requirements of Equal
Credit Opportunity Act (ECOA)?
A.) E-mail
B.) Mailed letter
C.) Telephone
D.) Faxed letter - ANS-C.) Telephone
Term "20 basis points" expressed as a percentage is:
, A.) 0.2%
B.) 0.20%
C.) 2.00%
D.) 20.00% - ANS-B.) 0.20%
one hundredth of one percent, used chiefly in expressing differences of interest rates.
0.01
so 0.01 x20 = 0.2
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 - ANS-A.) Hazard insurance
FHA loans are:
A.) Partially guaranteed
B.) 100% insured
C.) Exempt
D.) Entitled - ANS-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 - ANS-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 - ANS-B.) VA loan
