Free MLO Practice Test Questions 2026

A mortgage loan originator is not required to provide an applicant with an initial Loan Estimate within the three business day period requirement if the applicant does which of the following?

A. Signs a Truth in Lending statement

B. Withdraws the application within three business days

C. Has not selected a loan program

D. Waives the right to receive a Loan Estimate

Which of the following items may lenders use to verify a borrower's income for his ability to repay a mortgage?

A. An electronic paystub

B. A copy of a check register

C. The income stated on the loan application

D. The borrower's attestation that he expects a raise within 30 days

Which of the following fees or charges is an allowable closing cost typically found on a Closing Disclosure?

A. Origination charge

B. Referral fee

C. Servicing fee

D. Yield-to-loan fee

The practice of denying a creditworthy applicant a loan for housing because of the location of the property is sometimes referred to as:

A. steering.

B. redlining.

C. appraising.

D. low balling.

Which of the following responses describes the purpose of an appraisal in satisfying requirements for underwriting?

A. To ensure that the home is not an outlier to its comparables

B. To ensure that the market value is appropriate for the loan amount

C. To allow the seller a final opportunity to cancel the transaction

D. To allow the borrower a final opportunity to negotiate terms of the loan

A lender will require private mortgage insurance for first lien loans with loan-to-value over what percentage?

A. 70%

B. 75%

C. 78%

D. 80%

What are the maximum basis points added to the average prime offer rate (APOR) that keep a loan's APR as a qualified mortgage under the Consumer Financial Protection Bureau's (CFPB's) Safe Harbor Rule?

A. 85 basis points

B. 100 basis points

C. 150 basis points

D. 300 basis points

Which of the following is not a primary function for compensation undertaken by a mortgage loan originator on an FHA loan?

A. Taking an application

B. Offering or negotiating credit terms

C. Assisting a consumer in applying for credit

D. Performing real estate brokerage activities

How many days must a borrower's mortgage loan be delinquent before the mortgage company is permitted to submit the first notice filing in the foreclosure process?

A. 30 days

B. 60 days

C. 90 days

D. 120 days

Which of the following responses describes the required amount of flood insurance coverage?

A. The original appraised value of the home

B. The outstanding principal balance of the loan

C. The minimum amount of National Flood Insurance Program coverage available

D. The property value on file with the county property valuation administrator office

A sign that an appraisal report may be overvaluing a property is that the:

A. Comparable properties are consistent with the subject property.

B. Subject property and comparable properties were built by the same construction company.

C. Subject property is in the same neighborhood as the comparable properties.

D. Subject property address does not match the house number photographed by the appraiser.

The Truth in Lending Act (TILA) covers which of the following loans?

A. Agricultural credit

B. Home equity loans

C. Business or commercial credit

D. An extension of credit to other than a natural person