Free Mini Practice Exam

Free mini practice exam

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ⓘExam Mode: You'll see your results after completing all questions. This simulates the actual NMLS exam experience.

1. A buyer buys a home for $595,000 and puts 30% down. What is the amount of his down payment?

A 180000
B 30000
C 296250
D 178500

The down payment is 30% of the purchase price. 30% of $595,000 is $178,500.

2. Acceleration refers to the

A compensation paid directly or indirectly to a mortgage broker from any source.
B reduction of the interest rate applicable to a home loan.
C annual percentage rate of the loan calculated at closing.
D demand for immediate repayment of the entire balance of a home loan.

Acceleration in mortgage terms refers to the lender's right to demand immediate repayment of the entire loan balance under certain conditions, such as default.

3. If a lender denies a mortgage loan, what document informs the applicant of the denial?

A notice of incomplete application
B no document is required to be sent if the information is verbally relayed to the consumer
C payment letter
D adverse action notice

When a lender denies a mortgage loan, they must provide an adverse action notice to the applicant, explaining the reasons for denial as required by the Equal Credit Opportunity Act and the Fair Credit Reporting Act.

4. A borrower who closes on a primary residential mortgage with no intention of residing in the property may be referred to as a/an:

A Straw seller
B Red liner
C Straw borrower
D False Borrower

A straw borrower is someone who uses their identity to apply for a loan without intending to use or reside in the property, often for a fee or other compensation.

5. A borrower desires to purchase a home costing $435,000 and put down 30%. What would his loan amount be?

A 405000
B 410000
C 304500
D 153250

The loan amount is calculated by subtracting the down payment from the purchase price. The down payment is 30% of $435,000, which is $130,500. Subtracting this from the purchase price gives a loan amount of $304,500.

6. Conforming loans follow the underwriting guidelines of

A Freddie Mac and Ginnie Mae.
B Ginnie Mae and HUD.
C FHA.
D Fannie Mae and Freddie Mac.

Conforming loans follow the underwriting guidelines of Fannie Mae and Freddie Mac. This is directly stated in the provided correct answer.

7. Phil is refinancing his home, which is his principal residence, and signs the loan papers. How much time does Reg Z give him to change his mind?

A Phil has no right of rescission.
B Three business days
C 30 days
D 3 years

Under Regulation Z, Phil has a right of rescission that allows him three business days to change his mind after signing the loan documents for refinancing his principal residence.

8. Joe wants to get a loan to buy a house. When evaluating his credit obligations, which would not be considered as debt?

A child support payments
B car payment
C cell phone service payment
D credit card payments

Cell phone service payments are generally not considered a debt when evaluating credit obligations for a mortgage. The other options are considered debts.

9. Susie, an underwriter, is evaluating your mortgage loan application according to Fannie Mae/Freddie Mac underwriting criteria. Which factor will she NOT consider?

A net worth
B income
C national origin
D credit

Under Fannie Mae/Freddie Mac guidelines, national origin cannot be considered in the mortgage underwriting process as it would violate fair lending laws.

10. If a police officer is paid $3,800 semi-monthly, what is his monthly income?

A 6500
B 10100
C 7600
D 6600

Semi-monthly pay means the officer is paid twice a month. Multiplying $3,800 by 2 gives a monthly income of $7,600.

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