Mortgage Cheat Sheet 2026

The 30 highest-yield Mortgage facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. A mortgage company's marketing materials guarantee the lowest rate in the market without any conditions. This practice is: → A violation of truth-in-advertising and TILA requirements
2. Under the SAFE Act, a mortgage loan originator who moves from a bank to a non-bank entity must: → Obtain a state MLO license through NMLS
3. Which of the following costs is typically NOT paid by the borrower at closing? → The seller's real estate commission
4. Which statement best describes a 'rate and term refinance'? → Refinancing solely to change the interest rate, term, or both without taking cash out
5. An MLO steers a creditworthy borrower toward a high-cost loan because it pays a higher commission. This practice is best described as: → Predatory lending
6. What is the purpose of the initial escrow deposit collected at closing? → To fund the reserve account for future property tax and insurance payments
7. The Fannie Mae HomeReady program is designed primarily for: → Low-to-moderate income borrowers
8. A property appraises for $290,000 but the purchase price is $310,000. The lender uses which value to calculate LTV? → The appraised value of $290,000
9. Which regulation implements the Real Estate Settlement Procedures Act (RESPA)? → Regulation X
10. A borrower has a front-end DTI of 31% and a back-end DTI of 45%. Which conventional loan guideline does this violate? → Back-end limit of 43%
11. What is the purpose of an escrow impound account in a mortgage? → To collect and pay property taxes and insurance on behalf of the borrower
12. A borrower who claims a rental property as their primary residence to obtain a lower interest rate is committing: → Occupancy fraud
13. A mortgage professional discovers that a colleague has been backdating documents to meet a program deadline. What is the most appropriate course of action? → Report the conduct to their compliance department or supervisor
14. Under the SAFE Act, which entity maintains the Nationwide Multistate Licensing System (NMLS)? → The Conference of State Bank Supervisors (CSBS)
15. The Fair Housing Act prohibits mortgage lending discrimination based on all of the following EXCEPT which? → Credit history
16. What is the debt-to-income (DTI) ratio used for in mortgage underwriting? → To assess the borrower's ability to manage monthly payments relative to gross income
17. A borrower has a back-end DTI of 48% and is applying for a conventional loan. What is the most likely outcome? → Denial unless compensating factors exist
18. Under the SAFE Act, what is required of all mortgage loan originators? → Registration through the Nationwide Multistate Licensing System (NMLS)
19. A borrower's loan application is considered 'complete' under TRID when the lender has collected which six pieces of information? → Name, SSN, income, property address, estimated value, and loan amount
20. What is an 'air loan' in mortgage fraud? → A loan for a property that does not exist or a borrower who does not exist
21. When calculating the monthly payment on a $250,000 loan at 6% for 30 years, which component is NOT included in PITI? → Utility bills
22. What is the purpose of the 4506-C form in the underwriting process? → To request tax transcripts directly from the IRS
23. An MLO licensed in State A wants to originate a loan for a borrower purchasing property in State B, where the MLO is not licensed. What must the MLO do? → Obtain a license in State B before originating the loan
24. A borrower asks their MLO to recommend a specific title company owned by the MLO's spouse. What must the MLO do first? → Disclose the affiliated business relationship in writing to the borrower
25. The FHA 203(k) loan is specifically designed to finance: → Purchase and renovation of a home in a single loan
26. Which federal law requires mortgage servicers to provide borrowers with an annual escrow account statement? → Real Estate Settlement Procedures Act (RESPA)
27. What is the purpose of a 'gift letter' during the mortgage origination process? → To confirm that down payment funds received as a gift do not require repayment
28. Which provision of the Dodd-Frank Act created the Ability-to-Repay and Qualified Mortgage standards? → Section 1411 — ATR and QM Standards
29. An MLO applicant has a felony conviction from 9 years ago involving fraud. Under the SAFE Act, what is the status of their application? → Automatically denied due to the felony involving fraud
30. If a borrower is obtaining a mortgage on a property located in a different state than their primary residence, which state's Uniform State Content applies? → The state where the subject property is located