Practice Test Geeks(NMLS) National Mortgage Licensing System Practice Test
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Loan Application and Qualification 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 Loan Application and Qualification flashcards as text

  1. A borrower has a non-purchasing spouse in a community property state. How does this affect the mortgage application?

    Answer: The spouse's debts must be considered even if not on the loan

    In community property states, the non-purchasing spouse's debts are considered marital obligations and must be included in the borrower's DTI calculation.

  2. What is the minimum credit score required for an FHA loan with a 3.5% down payment?

    Answer: 580

    FHA guidelines require a minimum credit score of 580 for the 3.5% down payment option; scores between 500-579 require a 10% down payment.

  3. Which of the following gift fund sources is acceptable for a conventional loan down payment according to Fannie Mae guidelines?

    Answer: A gift from a family member

    Fannie Mae allows gift funds from relatives, domestic partners, and certain other acceptable donors, but gifts from sellers or those requiring repayment are prohibited.

  4. What is the purpose of a Verification of Employment (VOE) in the loan qualification process?

    Answer: To verify the borrower's current employment status and income

    A VOE is sent to the employer to confirm the borrower's job status, start date, and income to support the information provided on the loan application.

  5. Under Regulation B (ECOA), which of the following factors is prohibited from being used in a credit decision?

    Answer: Marital status

    ECOA prohibits credit decisions based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

  6. What is the maximum seller concession allowed on a conventional loan with an LTV greater than 90%?

    Answer: 3%

    Fannie Mae limits seller concessions to 3% of the purchase price when the LTV exceeds 90% to prevent inflated sales prices.

  7. When a borrower has multiple financed properties, how many financed properties can they typically have under Fannie Mae standard guidelines?

    Answer: Up to 10

    Fannie Mae allows borrowers to have up to 10 financed properties, though reserves and documentation requirements increase with each additional property.