Practice Test Geeks(NSA) Notary Signing Agent Certification Practice Test
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Loan Document Knowledge Flashcards

7 cards from real NSA 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 Document Knowledge flashcards as text

  1. Which federal law requires lenders to provide the Loan Estimate within three business days of receiving a loan application?

    Answer: TRID (Know Before You Owe)

    The TRID rule (TILA-RESPA Integrated Disclosure), known as Know Before You Owe, mandates delivery of the Loan Estimate within three business days of application.

  2. What does a 'limited power of attorney' at a loan signing allow?

    Answer: A designated agent to sign specific closing documents on behalf of an absent borrower

    A limited power of attorney grants a specific person authority to sign designated closing documents on behalf of a borrower who cannot attend the closing.

  3. What does 'LTV' stand for in mortgage lending, and why does it matter?

    Answer: Loan-to-Value ratio; affects the interest rate and whether PMI is required

    LTV (Loan-to-Value) is the loan amount divided by the property's appraised value, and a high LTV typically requires private mortgage insurance (PMI).

  4. The 'initial escrow payment at closing' on a Closing Disclosure covers:

    Answer: Upfront funds to establish the escrow account reserve for taxes and insurance

    The initial escrow payment at closing seeds the borrower's escrow account with enough reserves to pay upcoming tax and insurance bills.

  5. Which document would a notary signing agent look at to confirm the exact loan amount being borrowed?

    Answer: The Promissory Note

    The Promissory Note states the exact principal loan amount the borrower is obligated to repay.

  6. What is the function of lender's title insurance in a mortgage transaction?

    Answer: Protects the lender against losses from title defects or claims on the property

    Lender's title insurance protects the lender's financial interest against title defects, liens, or ownership disputes discovered after closing.

  7. If a borrower's loan is an ARM, what does the 'adjustment cap' limit?

    Answer: The maximum interest rate change at each adjustment period and over the life of the loan

    Adjustment caps on an ARM restrict how much the interest rate can increase or decrease at each adjustment period and in total over the loan's life.