NMLS SAFE Practice Test

NMLS SAFE Application & Qualification Practice Questions

Application & Qualification makes up 7 of every 50 questions on a Tigertest NMLS SAFE practice test. Here are 10 of the 28 questions on it, each with the answer and the reason.

Updated 2026-11-10 by the Tigertest team. Based on the NMLS SAFE MLO content outline. Original questions; 50 per test, weighted like the real 120-question test, 75% to pass. Not affiliated with NMLS.

1. 1. Which form is the standard residential mortgage application used by Fannie Mae and Freddie Mac?

   • A.Uniform Residential Appraisal Report
   • B.Uniform Residential Loan Application
   • C.Uniform Settlement Statement
   • D.Uniform Underwriting Transmittal

   Answer: B. The Uniform Residential Loan Application (Form 1003/65) collects borrower, property, employment, asset and liability information. The appraisal report is a separate form.

2. 2. A borrower applies for an adjustable-rate mortgage. Under Regulation Z, the lender must give the CHARM booklet:

   • A.Within 30 days after closing
   • B.Only if the rate first adjusts
   • C.At closing with the loan note
   • D.At application or before any fee

   Answer: D. The Consumer Handbook on Adjustable-Rate Mortgages and the loan program disclosure are due at application or before the consumer pays a nonrefundable fee, whichever is earlier.

3. 3. For a purchase loan application, the lender must give the borrower the CFPB's Your Home Loan Toolkit within:

   • A.Three business days of applying
   • B.One business day after approval
   • C.Seven business days of applying
   • D.Ten days before closing

   Answer: A. RESPA requires the special information booklet, now the Home Loan Toolkit, within three business days after a purchase-money application.

4. 4. A borrower changed jobs four months ago in the same line of work after six years with the old employer. When reviewing employment, the lender generally looks for:

   • A.No change in the last two years
   • B.One year at the new employer
   • C.A two-year history in the field
   • D.Five years at the new employer

   Answer: C. Underwriters generally verify a two-year employment and income history. A recent move within the same field with steady or higher pay is usually acceptable.

5. 5. A self-employed borrower applies for a conventional loan. To document income, the lender will most often require:

   • A.One year of bank statements only
   • B.A letter from the borrower's CPA only
   • C.Two years of tax returns
   • D.Three months of pay stubs

   Answer: C. Self-employment income is usually averaged from the last two years of personal and business federal tax returns, with a profit and loss statement where needed.

6. 6. A buyer's parents give $25,000 toward the down payment. The lender will usually require:

   • A.A signed gift letter
   • B.A second lien in the parents' name
   • C.A copy of the parents' tax return
   • D.A promissory note from the parents

   Answer: A. A gift letter states the amount, the donor's relationship and that no repayment is expected, and the lender documents the transfer of funds. A loan from the parents would be a debt, not a gift.

7. 7. A borrower's bank statement shows a large deposit that is not from payroll. The originator should:

   • A.Ask the borrower to move it elsewhere
   • B.Ignore it since the funds are there
   • C.Remove that statement from the file
   • D.Document the source of the deposit

   Answer: D. Large or unusual deposits must be sourced and explained in writing, since undisclosed loans or illegal funds may be behind them.

8. 8. A borrower earns $9,000 a month gross. The proposed PITI is $2,070 and other monthly debts are $900. The back-end debt-to-income ratio is:

   • A.39%
   • B.33%
   • C.23%
   • D.10%

   Answer: B. Total monthly obligations divided by gross income: ($2,070 + $900) / $9,000 = 33%. The housing (front-end) ratio alone is 23%.

9. 9. A borrower earns $6,500 a month. Using a 31% housing ratio, the highest monthly housing payment allowed is:

   • A.$2,100
   • B.$2,015
   • C.$2,795
   • D.$1,950

   Answer: B. The housing payment limit is gross monthly income times the front-end ratio: $6,500 x 0.31 = $2,015.

10. 10. A borrower has three credit scores: 702, 676 and 731. For a single borrower, most lenders qualify using:

    • A.731
    • B.703, the average
    • C.676
    • D.702

    Answer: D. With three bureau scores, lenders usually use the middle one, here 702. With two scores, the lower is used.