FREE Mortgage Loan Originator Assessment Questions and Answers

Question 1

Regarding a debt that has partially amortized, all of the following are true, with the exception of:

Accepted Answer

A partially amortized loan is a self-liquidating loan.

Answer

Interest is being paid throughout the term.

Answer

The final payment is a balloon payment.

Answer

The periodic payments do not fully amortize the loan by the end of the term.

Question 2

Which of the following statements about a straight-term mortgage is true?

Accepted Answer

No principal payments are being made.

Answer

Payments are made to interest only.

Answer

It is the same as a partially amortized loan.​

Answer

The last payment is interest for the last period plus the entire principal amount.

Question 3

Regarding a blanket mortgage, all of the following are true, with the exception of:

Accepted Answer

A blanket mortgage usually includes a full release clause.

Answer

A blanket mortgage covers more than one parcel of land or lot.

Answer

A blanket mortgage is often used to finance subdivision developments.

Answer

A blanket mortgage allows some of the lots of a subdivision to be released and no longer be encumbered.

Question 4

How long does it take to pay off a bridge loan?

Accepted Answer

When the second loan is taken out.

Answer

In the transition between two properties.

Answer

When the bridge is completed.

Answer

When the first loan is terminated.

Question 5

Which of the following statements about a cash-out mortgage is accurate:

Accepted Answer

All of the above

Answer

It could be a refi that provides the owner with cash.

Answer

It could be a junior or senior loan.

Answer

It allows borrowers to tap into the equity buildup.

Question 6

Regarding a building loan, every statement is accurate, with the exception of:

Accepted Answer

The construction mortgage is referred to as a take-out loan.

Answer

The construction mortgage usually involves extended rate locks.

Answer

The construction mortgage is an interim loan.

Answer

The construction mortgage involves obligatory advances.

Question 7

Which of the following statements most accurately reflects mandatory advances for construction loans:

Accepted Answer

It is funds paid to the builder as various phases of the construction project are completed.

Answer

Obligatory advances occur when the builder makes payments on the construction loan.

Answer

Obligatory advances refer to a builder paying subcontractors at the appropriate time.

Answer

It is the way funds used to be distributed to the builder; however, now all funds are released upfront.

Question 8

Which statement about a permanent construction loan is accurate:

Accepted Answer

There is no such thing as a permanent construction loan as this would mean the construction would be ongoing in perpetuity.

Answer

There is only one with one closing with no take-out loan.

Answer

The one loan that is used for construction at the beginning converts to a permanent first mortgage when the construction is finished.

Answer

None of the above

Question 9

Which of the following loans would have likely been provided in the past to someone looking to purchase a home but with less-than-perfect credit?

Accepted Answer

Easy qualifier loan

Answer

Home equity loan

Answer

Blanket mortgage

Answer

Bridge mortgage

Question 10

Which of the following would determine whether easy-qualifier loans were available:

Accepted Answer

Current market conditions

Answer

One-year treasury index

Answer

Interest rates

Answer

NMP guidelines