Practice Test Geeks(NMLS) National Mortgage Licensing System Practice Test
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General Mortgage Knowledge Flashcards

7 cards from real NMLS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 General Mortgage Knowledge flashcards as text

  1. In an adjustable-rate mortgage, the fully indexed rate equals:

    Answer: Index plus margin

    The fully indexed rate is the current index value plus the lender's margin.

  2. What characterizes a balloon mortgage?

    Answer: A large lump-sum payment is due at maturity

    Payments are based on a longer amortization, leaving a large remaining balance due at the end of a shorter term.

  3. Which appraisal approach is most commonly used for single-family residential properties?

    Answer: Sales comparison approach

    Residential appraisals rely mainly on recent comparable sales.

  4. A lender's title insurance policy protects whom?

    Answer: The lender's lien interest

    The lender's policy protects the lender's security interest up to the loan amount.

  5. What is the monthly interest-only payment on a $300,000 loan at 6% annual interest?

    Answer: $1,500

    $300,000 × 6% = $18,000 per year, or $1,500 per month.

  6. In a cash-out refinance, the borrower:

    Answer: Receives funds from a new loan larger than the existing payoff

    A new, larger loan pays off the old one, and the difference goes to the borrower.

  7. Which loan feature is generally prohibited in a Qualified Mortgage?

    Answer: Negative amortization

    QM rules prohibit negative amortization, interest-only, and (generally) balloon features.

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