Free MLO Practice Test Questions 2026

Which of the following statements is permissible in an advertisement?

A. "Current interest rates as low as 3.50% with an APR of 3.99%. Contact us today!"

B. "Looking for a VA loan? We are endorsed by and affiliated with the VA administration."

C. "Take out a reverse mortgage loan with us, and you can stay in your home as long as you want and never make a payment."

D. "Close a mortgage loan with us within the next 60 days and when interest rates drop, we will refinance your loan at a lower rate guaranteed."

If a borrower believes that there is incorrect information on their credit report, which of the following actions should they take?

A. Ask the lender to fix the error

B. Call the credit bureau to report the error

C. Make a written notification to the credit bureau to report the error

D. Ask the company that is reporting the error to the credit bureau to fix the error

According to the Truth in Lending Act (TILA), the term "finance charge" includes which of the following charges?

A. Daily or per diem interest paid by borrower

B. Seller's points offered to reduce the borrower's closing costs

C. A standard credit application fee charged to all loan applicants

D. Document preparation fees for items such as mortgages and deeds

The loan-to-value ratio for an FHA loan is calculated by dividing the loan amount by:

A. the purchase price of the property.

B. the appraised value of the property.

C. the lesser of the purchase price or appraised value.

D. the purchase price, plus the mortgage insurance for FHA loans.

The Equal Credit Opportunity Act (ECOA) defines the term "elderly" as anyone:

A. 60 years of age or older.

B. 62 years of age or older.

C. 65 years of age or older.

D. 70 years of age or older.

In a federally related mortgage loan transaction, a charge for a settlement service by a person for which no services or nominal services are performed is prohibited:

A. regardless of the sources of payment.

B. only if it is paid by the borrower's real estate agent.

C. unless it is paid by the seller or the seller's real estate agent.

D. unless it is paid by the mortgage loan originator on the borrower's behalf.

Under the TILA-RESPA Integrated Disclosure rule (TRID), what is the minimum time period that must pass between a borrower's receipt of a Loan Estimate and the closing of a mortgage loan?

A. 7 business days

B. 15 business days

C. 30 business days

D. 45 calendar days

A lender is permitted to accept the employment information provided by the borrower on the initial loan application without asking for a letter of explanation in which of the following circumstances?

A. The borrower lacks a history in an industry that requires specific skills.

B. A recent college graduate holds a high-level position in the organization.

C. The residence is more than 120 miles from the work location on a refinance.

D. The borrower has been employed by the same company for three years.

According to the Truth in Lending Act (TILA), which of the following advertising statements does not require additional disclosures to supplement the advertisement?

A. "Payments as low as $600 for a $100,000 mortgage"

B. "Only 1 point up front to get you in a home"

C. "15-year and 30-year mortgages available"

D. "Come in today for your free consultation"

In a loan transaction subject to the TILA-RESPA Integrated Disclosure rule (TRID), the creditor must ensure that the consumer receives a Closing Disclosure reflecting the actual terms of the transaction:

A. Within three business days of the loan application date.

B. No later than one business day before consummation.

C. No later than three business days before consummation.

D. No later than seven business days before consummation.

Which of the following information is required to be included on Uniform Residential Loan Application?

A. Assets and liabilities

B. Appraiser name and address

C. Homeowners insurance provider

D. Proof of homeownership counseling

Which of the following property value approaches does an appraiser use on a rental property?

A. Cost approachB Income approach

B. Annual approach

C. Sales comparison approach