Download NMLS Exam 2024: Multiple Choice Questions and Answers and more Exams Real Estate Management in PDF only on Docsity!
NMLS EXAM 2024
WITH 100% CORRECT ANSWERS
“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 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, B.) $27, C.) $30,
D.) $25,000 - Correct Answer D.) $25,
$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. B.) $2,343. C.) $2,379.
D.) $2,487.68 - Correct Answer B.) $2,343.
$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% - Correct Answer 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 - Correct Answer 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 - Correct Answer
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 - Correct Answer 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 - Correct Answer C.) Telephone"
"Term "20 basis points" expressed as a percentage is: 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.
D.) Mortgage broker - Correct Answer B.) Lender"
"The borrower does NOT sign which document: A.) Deed B.) HUD-1/Loan Disclosure C.) Mortgage
D.) Note - Correct Answer A.) Deed"
"Which documents is usually NOT recorded A.) Assignment of mortgage B.) Note C.) Deed
D.) Mortgage - Correct Answer B.) Note"
"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"
"Which parties sign the deed? A.) Grantor, grantee and two witnesses B.) Grantor and two witnesses C.) Grantee and two witnesses
D.) Grantee only - Correct Answer B.) Grantor and two witnesses"
"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"
"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 loan on personal property only known as: A.) Package mortgage B.) Chattel mortgage C.) Furnishing mortgage
D.) Exotic mortgage - Correct Answer B.) Chattel mortgage
Investopedia Chattel mortgage is a legal term used to describe a loan arrangement in which an item of movable personal property is used as security for the loan. The movable property, or chattel, guarantees the loan in this type of mortgage. This differs from a conventional mortgage in which the loan is secured by a lien on real property." "Which of the following is NOT a characteristic of a Tenants in Common form of ownership: A.) Equal shares B.) Buy at different times C.) Right survivorship
D.) Ability to will share - Correct Answer C.) Right survivorship"
"PITI payments do NOT include which of the following: A.) Principle B.) Funding Fee C.) Hazard Insurance
D.) Interest - Correct Answer B.) Funding Fee"
"Who does Fannie Mae hold responsible for the quality of an appraisal? A.) Appraiser B.) Borrower C.) Mortgage broker
D.) Lender - Correct Answer D.) Lender"
"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 prohibits discrimination by lenders?
A.) 5%
B.) 10%
C.) 25%
D.) 50% - Correct Answer C.) 25%"
"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"
"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"
"Which law defines the right of rescission? A.) Truth-in-Lending B.) Real Estate Settlement Procedures Act C.) Equal Credit Opportunity Act
D.) Patriot Act - Correct Answer A.) Truth-in-Lending
Investopedia A right of rescission is a right under American federal law set forth by the Truth in Lending Act (TILA) that gives a borrower the right to cancel a home equity loan or line of credit with a new lender, or to cancel a refinance transaction done with another lender other than the current mortgagee within three days of closing. The right is provided on a no-questions-asked basis, and the lender must give up its claim to the property and refund all fees within 20 days of exercising of the right of rescission." "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"
"Credit reports on new construction are good for how many days? A.) 90 days
B.) 120 days C.) 180 days
D.) 225 days - Correct Answer B.) 120 days"
"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"
"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"
"Which of the following increases cap rate? A.) Lower purchase price B.) Increase purchase price C.) Decrease cash flow
D.) Increase interest rate - Correct Answer B.) Increase purchase price"
"Who should applicants contact if they have questions about their credit score or credit information? A.) Credit reporting agency B.) Lender C.) Mortgage broker
D.) Attorney - Correct Answer A.) Credit reporting agency"
"Who is responsible for maintaining the national flood maps? A.) HUD B.) FEMA
A.) $1,
B.) $2,
C.) $3,
D.) $4,000 - Correct Answer C.) $3,
The key to this question is POINTS last time i accidentally added the 6% interest. There is 2 points so $180,000 x .02 = $3,600" "If the Gross Rent Multiplier (GRM) decreases, the property value: A.) Increases B.) Decreases C.) Does not change
D.) Can increase or decrease - Correct Answer B.) Decreases"
"What is the maximum allowable amount of VA seller concessions? A.) 2% B.) 3% C.) 4%
D.) 5% - Correct Answer C.) 4%"
"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"
"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 of the following is incorrect regarding an adjustable-rate mortgage?
A.) The index is fixed B.) The margin is fixed C.) There are rate caps on both the adjustment period and the life of the loan
D.) LIBOR is a typical index used - Correct Answer A.) The index is fixed"
"Which of the following is NOT a fully amortized loan? A.) Term mortgage B.) Fixed-rate mortgage C.) Adjustable-rate mortgage
D.) Bi-weekly mortgage - Correct Answer A.) Term mortgage"
"Which of the following is a negatively amortizing loan? A.) Reverse mortgage B.) Balloon mortgage C.) Term mortgage
D.) Wrap mortgage - Correct Answer A.) Reverse mortgage"
"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"
"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 mortgage 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 D.) The
document that transfers contractual rights to another investor"
"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"
"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"
"VA loans are: A.) Partially guaranteed B.) Insured C.) Exempt
D.) Entitled - Correct Answer A.) Partially guaranteed"
"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 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%
"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 = $143,750" "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 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"
"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"
"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"
"Fannie Mae allows what amount of fees to be charged to a credit card?
"Credit reports are good for how many days after they are pulled for qualifying purposes? A.) 60 B.) 90 C.) 120
D.) 180 - Correct Answer C.) 120"
"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 of the following is correct for an adjustable-rate mortgage A.) Index - margin = fully indexed rate B.) Margin - Index = fully indexed rate C.) Index + Margin = fully indexed rate
D.) Index - Margin = fully indexed rate - Correct Answer C.) Index + Margin = fully indexed rate"
"The maximum term for a FHA loan is: A.) 15 years B.) 30 years C.) 40 years
D.) 50 years - Correct Answer B.) 30 years"
"Which of the following is NOT an involuntary lien A.) IRA lien B.) Judgment lien C.) Mortgage lien
D.) Mechanic's lien - Correct Answer C.) Mortgage lien"
"The most comprehensive form of ownership is: A.) Real Estate Investment Trust B.) Fee simple absolute C.) Tenants in common
D.) Joint tenancy - Correct Answer B.) Fee simple absolute"
"Which is NOT a component of a valid contract?
A.) Agreement B.) Consideration C.) Two witnesses
D.) Competent parties - Correct Answer C.) Two witnesses"
"Which type of co-ownership permits the property to pass an heir? A.) Collaboration B.) Tenants in common C.) Joint tenancy
D.) Subordination - Correct Answer B.) Tenants in common"
"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"
"Which law allows consumers a free copy of their credit report every year? 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 B.) The Fair and Accurate Credit Transaction
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 entitles an applicant to a copy of his property appraisal report? 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 is also known as Regulation X
