Free MLO Practice Test Questions 2026

Which of the following factors is not required to be taken into account when determining a borrower's ability to repay a loan?

A. Current debt obligations, alimony and child support

B. Credit history

C. Proceeds from the sale of the property securing the loan

D. Monthly payment on simultaneous loans

A borrower's monthly debt-to-income ratio is calculated by taking the:

A. borrower's gross monthly housing expense divided by the principal, interest, and appraised value.

B. eligible total monthly debt obligations, including the monthly housing expense, divided by the borrower's gross monthly income.

C. eligible total monthly debt obligations for trade lines greater than 12 months multiplied by the borrower's net monthly income.D eligible total monthly debt obligations excluding the monthly housing expense divided by the borrower's net monthly income

Which of the following practices is a prudent and reasonable cybersecurity precaution regarding laptop computers?

A. A laptop should never be taken out of the office.

B. A laptop should be shared by no more than five people.

C. Passwords should only be shared with a direct supervisor.

D. A laptop should automatically shut down and require a new login if not used for a period of time.

Which of the following settlement service charges is considered a finance charge for the purpose of calculating a loan's APR?

A. Credit report fee

B. Origination charge

C. Transfer tax charge

D. Public record recording fee

Which of the following characteristics is unique to a home equity line of credit (HELOC)?

A. A borrower is permitted to receive additional advances.

B. A borrower is permitted to make interest-only payments for the term of the loan.

C. A borrower is permitted to borrow more than the property is worth.

D. A borrower is permitted to sell the property without paying off the loan.

The appraiser valuation independence obligates appraisers to perform their duties in a manner free from outside influence through which of the following actions?

A. Encouraging a target value

B. Withholding payment from an appraiser

C. Asking the appraiser to substantiate a value

D. Communication directly between the loan officer and the appraiser

According to the Truth in Lending Act (TILA), a dwelling includes which of the following?

A. An unimproved lot

B. A six-unit apartment complex

C. An individual condominium unit

D. A timeshare

An individual who is a loan processor or underwriter must maintain a state originator license if they:

A. perform clerical duties for a mortgage lender as a supervised employee

B. are not in communication with the consumer to obtain mortgage loan information.

C. are an independent contractor and collect, receive or distribute information in connection with making a credit decision.

D. are an employee of a loan processing or underwriting company that supports a mortgage broker/lender and only perform supervised clerical duties.

When providing documents to a state regulator regarding a consumer complaint that was submitted to the state regulator, a licensed company should:

A. Send the documents by U.S. mail rather than electronically for privacy reasons.

B. Contact the consumer to get their authorization to provide documents to the regulator.

C. Provide the documents along with the company's explanation of what caused the complaint.

D. Redact any names and personal information before providing the documents for privacy reasons.

Which of the following documents is required to be issued to a customer when a mortgage loan originator is also a real estate broker on the same transaction?

A. Loan application

B. Appraisal disclosure

C. Special information booklet

D. Affiliated business arrangement

Which of the following circumstances may indicate fraud with respect to the assets a borrower will use for closing?

A. Bank deposits that are not supported by income or other disclosures

B. Disclosure of gift funds

C. Parental loans disclosed but not yet received

D. Borrower's receipt of a large bonus from an employer

If an applicant provides a waiver for the requirement to receive their appraisal three business days prior to a loan's consummation and the transaction ends up not closing at all, a creditor must still provide a copy of the appraisal no later than how many days after the creditor determines consummation will not occur?

A. 10 days

B. 30 days

C. 45 days

D. 60 days