Mortgage Loan Originator Flashcards
7 cards from real Mortgage Loan Originator practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Mortgage Loan Originator flashcards as text
Under the SAFE Act, how many hours of continuing education must a licensed MLO complete annually to maintain their license?
Answer: 8 hours
The SAFE Act requires licensed MLOs to complete at least 8 hours of NMLS-approved continuing education annually.
A property appraises for $280,000 and the borrower makes a $42,000 down payment. What is the loan-to-value (LTV) ratio?
Answer: 85%
LTV = ($280,000 - $42,000) / $280,000 = $238,000 / $280,000 = 85%.
What is the primary purpose of the Home Mortgage Disclosure Act (HMDA)?
Answer: To provide public data to identify potential discriminatory lending patterns
HMDA requires financial institutions to collect and report loan data to help regulators identify discriminatory lending practices.
In a purchase transaction, a seller agrees to pay 3% of the purchase price toward the buyer's closing costs. This arrangement is called:
Answer: An interested party contribution
When a seller or other interested party contributes toward the buyer's costs, it is formally called an interested party contribution (IPC), subject to agency limits.
An adjustable-rate mortgage has a 5/1 structure with a 2/2/5 cap. If the start rate is 4%, what is the maximum rate the loan can reach over its lifetime?
Answer: 9%
The lifetime cap of 5% over the start rate means 4% + 5% = 9% maximum.
Which loan program allows a veteran to purchase a home with no down payment and no private mortgage insurance requirement?
Answer: VA loan
VA loans are guaranteed by the Department of Veterans Affairs, allowing eligible veterans to buy with zero down payment and no PMI.
Under Regulation Z, when must a lender provide a borrower with the right to rescind on a refinance of their primary residence?
Answer: Within 3 business days after consummation, delivery of the notice, or delivery of all material disclosures
The right of rescission on refinances of primary residences expires three business days after the latest of consummation, delivery of the rescission notice, or delivery of all required disclosures.