NMLS Practice Test Hard Questions with Verified Answers 2025, Exams of Information and Communications Technology (ICT)

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NMLS Practice Test Hard Questions

with Verified Answers 2025

A buyer has made an earnest money payment of $5,000. The buyer pays an additional $2, 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 - CORRECT ANSWER D.) $25, $160,000 x .20 (20%) = 32000 - $7,000 = $25, 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 - CORRECT ANSWER A.) A lender to decrease the interest rate on the mortgage loan A five bedroom, one bathroom house is an example of: A.) Appreciation B.) Functional Obsolescence C.) Economic Obsolescence D.) Residential Obsolescence - CORRECT ANSWER B.) Functional Obsolescence A funding fee if required for a:

A.) The document that conveys title B.) The pledge of the property as collateral for the loan C.) The borrower's IOU D.) The document that transfers contractual rights to another investor - CORRECT ANSWER D.) The document that transfers contractual rights to another investor A mortgage title insurance policy is NOT A.) Based on the loan amount B.) Transferable C.) Optional D.) Required by the lender - CORRECT ANSWER C.) Optional A mortgagor's title insurance policy is: A.) Transferable B.) Required C.) Based on purchase price D.) Never used - CORRECT ANSWER C.) Based on purchase price A note is: A.) The document that conveys title B.) The pledge of the property as collateral for the loan C.) The borrower's IOU D.) The document that transfers contractual rights to another investor - CORRECT ANSWER C.) The borrower's IOU 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$ - CORRECT ANSWER B.) 83.3%

A salaried employee may have to produce which of the following documents to obtain a loan? A.) 90 day pay stubs B.) 2 years W2's C.) Profit and Loss statement D.) Balance sheet - CORRECT ANSWER B.) 2 years W2's A shrubbery hedge is one example of an: A.) Encumbrance B.) Easement C.) Entitlement D.) Acceptable title impediment - CORRECT ANSWER D.) Acceptable title impediment A VA appraisal is known as a: A.) CRV B.) Veteran's appraisal report C.) Fannie Mae 1025 D.) AVA - CORRECT ANSWER A.) CRV 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 - CORRECT ANSWER D.) The satisfaction of an existing obligation and its replacement by a new obligation 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

A.) 1 % of the loan amount plus $500 for the appraisal and credit report B.) 2 % of the loan amount plus $500 for the appraisal and credit report C.) 3 % of the loan amount plus $500 for the appraisal and credit report D.) 4 % of the loan amount plus $500 for the appraisal and credit report - CORRECT ANSWER A.) 1 % of the loan amount plus $500 for the appraisal and credit report Fannie Mae does NOT require: A.) 6 months of bank statements B.) Verifiable funds C.) 2 years of addresses D.) Stable 2 year work history - CORRECT ANSWER A.) 6 months of bank statements Fannie Mae's automated underwriting system is known as: A.) Fannie Mannie B.) Software Helper C.) Desktop Underwriter D.) Loan Prospector - CORRECT ANSWER C.) Desktop Underwriter FHA loans are: A.) Partially guaranteed B.) 100% insured C.) Exempt D.) Entitled - CORRECT ANSWER A.) Partially guaranteed Freddie Mac was originally known as: A.) Federal Home Loan Mortgage Corporation B.) Federal National Mortgage Association C.) Fair Discount Interest Rates D.) Free Certificate of Deposits - CORRECT ANSWER A.) Federal Home Loan Mortgage Corporation

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 - CORRECT ANSWER D.) 3 years How many days does a lender have to send an adverse action notice? A.) 5 B.) 10 C.) 30 D.) 60 - CORRECT ANSWER C.) 30 How many hours of continuing education are minimally required? A.) 8 hours every year B.) 14 hours every year C.) 14 hours every 2 years D.) 20 hours every 2 years - CORRECT ANSWER A.) 8 hours every year 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 - CORRECT ANSWER D.) It is always included 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.

A.) 0.2%

B.) 0.20%

C.) 2.00%

D.) 20.00% - CORRECT ANSWER B.) 0.20%

one hundredth of one percent, used chiefly in expressing differences of interest rates. 0. so 0.01 x20 = 0. The assignee of a mortgage and note is participating the in the: A.) Primary lending market B.) Capital market C.) Secondary mortgage market D.) Options market - CORRECT ANSWER C.) Secondary mortgage market The borrower does NOT sign which document: A.) Deed B.) HUD-1/Loan Disclosure C.) Mortgage D.) Note - CORRECT ANSWER A.) Deed The economic concept which states that a knowledgeable buyer will pay no more for one property than they would pay for an equally desirable comparable property is: A.) Principle of Substitution B.) Principle of Highest and Best Use C.) Principle of Market Value D.) Principle of Intelligent Purchases - CORRECT ANSWER A.) Principle of Substitution The enforcement of a lien is known as: A.) Closing

B.) Foreclosure C.) Warranty inspection D.) Police Action - CORRECT ANSWER B.) Foreclosure 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 - CORRECT ANSWER A.) 3 business days 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 - CORRECT ANSWER C.) 5% of principle and interest The late fee for a VA loan is: A.) 3% of principal and interest B.) 4% of principal and interest C.) 5% of principal and interest D.) 10% of principal and interest - CORRECT ANSWER B.) 4% of principal and interest The lender has how many days to send the Satisfaction of Mortgage letter to the borrower once the loan balance is paid? A.) 30 days B.) 60 days C.) 90 days D.) 120 days - CORRECT ANSWER B.) 60 days The maximum term for a FHA loan is:

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, The purchase price of a home is $325,000 and the appraisal price is $350,000. If the first mortgage is in the amount of $200,000 and the second mortgage is $60,000. What is the combined loan-to-value ratio? A.) 78.3% B.) 80.0% C.) 86.7% D.) 92.3% - CORRECT ANSWER B.) 80.0% $200,000 + $60,000 = $260,000 / $325,000 = 80.0% The purchase price of a home is $375,000 and the buyer will assume a $175000 1st mortgage. The loan-to-value cannot exceed 85%. What is the maximum amount of the new 2nd mortgage. A.) $130, B.) $143, C.) $162, D.) $171,260 - CORRECT ANSWER B.) $143, $375,000 x .85 (85%) = $318,750 - $175,000 = $143, 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% - CORRECT ANSWER C.) 80%

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 - CORRECT ANSWER A.) $164. 100,000 x .06 (6%) = 6000 / 365 days = 16.438 x 10days = $164. VA loans are: A.) Partially guaranteed B.) Insured C.) Exempt D.) Entitled - CORRECT ANSWER A.) Partially guaranteed What clause in a mortgage allows the lender to call the entire loan balance due? A.) Defeasance B.) Escalation C.) Acceleration D.) Exculpatory - CORRECT ANSWER C.) Acceleration What clause in a mortgage prevents the lender from recovering additional assets from the mortgagor if there is a shortfall in the foreclosure proceeds A.) Forbearance B.) Escalation C.) Acceleration D.) Exculpatory - CORRECT ANSWER D.) Exculpatory What does a loan originator use to determine the estimated value of a property based on an analytical comparison of similar property sales?

A.) 5%

B.) 10%

C.) 25%

D.) 50% - CORRECT ANSWER C.) 25%

What term describes the intentional delay of action on the part of the lender upon a borrower's default? A.) Forbearance B.) Escalation C.) Acceleration D.) Exculpatory - CORRECT ANSWER A.) Forbearance When a property increases in value for any reason this is known as: A.) Acceleration B.) Appreciation C.) Accumulation D.) Acclimation - CORRECT ANSWER B.) Appreciation 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 - CORRECT ANSWER A.) Simultaneous issue When title is transferred and the buyer assumes no liability for the note, this type of transference is known as: A.) Free and clear B.) Subject to the mortgage C.) Assumption

D.) Novation - CORRECT ANSWER B.) Subject to the mortgage 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 - CORRECT 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 clause in a mortgage allows a lender to increase the interest rate? A.) Defeasance B.) Escalation C.) Acceleration D.) Exculpatory - CORRECT ANSWER B.) Escalation Which clause in a mortgage prevents the lender from foreclosing unless the borrower is in default? A.) Defeasance B.) Escalation C.) Acceleration D.) Exculpatory - CORRECT ANSWER A.) Defeasance Which documents is usually NOT recorded A.) Assignment of mortgage B.) Note C.) Deed D.) Mortgage - CORRECT ANSWER B.) Note

D.) The Equal Credit Opportunity Act - CORRECT ANSWER D.) The Equal Credit Opportunity Act Which law is also known as Regulation X A.) Truth in Lending B.) Real Estate Settlement Procedures Act C.) Homeowner's Protection Act D.) The Equal Credit Opportunity Act - CORRECT ANSWER B.) Real Estate Settlement Procedures Act Which law is known as Regulation B? A.) Truth-in-Lending B.) Real Estate Settlement Procedures Act C.) Equal Credit Opportunity Act D.) Patriot Act - CORRECT ANSWER C.) Equal Credit Opportunity Act Which law is known as Regulation C A.) Real Estate Settlement Procedures Act B.) Truth-in-Lending C.) Equal Credit Opportunity Act D.) Home Mortgage Disclosure Act - CORRECT ANSWER D.) Home Mortgage Disclosure 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 - CORRECT ANSWER C.) Equal Credit Opportunity Act Which law protects an individual's confidential information? A.) Truth in Lending

B.) Real Estate Settlement Procedures Act C.) Homeowner's Protection Act D.) Gramm-Leach-Bliley Act - CORRECT ANSWER D.) Gramm-Leach-Bliley Act Which law required the interviewer to complete the Government Monitoring section on the 1003? A.) Homeowner's Protection Act B.) The Fair and Accurate Credit Transaction Act C.) Truth-in-Lending D.) The Equal Credit Opportunity Act - CORRECT ANSWER D.) The Equal Credit Opportunity Act Which law requires that the Special Information booklet be given to borrowers? A.) Truth in Lending B.) Real Estate Settlement Procedures Act C.) Homeowner's Protection Act D.) The Equal Credit Opportunity Act - CORRECT ANSWER B.) Real Estate Settlement Procedures Act 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 - CORRECT ANSWER B.) HUD-1/closing Disclosure Which of the following does NOT appear in a lock-in agreement? A.) Expiration date B.) APR C.) Lock-in fee D.) Interest rate - CORRECT ANSWER B.) APR Which of the following increases cap rate?