MLO Exam Questions by Topic (with Answers)

Updated October 20, 2026

The SAFE MLO test draws from five areas: federal mortgage law (24%), Uniform State Content (11%), general mortgage knowledge (20%), loan origination activities (27%), and ethics (18%). Here are sample questions from each area, written from the regulations they test.

Federal mortgage-related laws

1. Which law prohibits giving or accepting a fee in exchange for referring settlement-service business?
  1. ECOA
  2. HMDA
  3. RESPA Section 8
  4. FCRA
Show answer and explanation

Answer: C. RESPA Section 8
Correct — RESPA §8 bans kickbacks and unearned fees.

Source: 12 CFR 1024.14(b)

2. The TILA right of rescission generally applies to which transaction?
  1. Purchase-money mortgage on a principal residence
  2. Refinance of a principal dwelling with a new creditor
  3. Loan to buy a vacation home
  4. Construction loan for a new principal residence
Show answer and explanation

Answer: B. Refinance of a principal dwelling with a new creditor
Correct — a non-purchase loan secured by the consumer's principal dwelling with a new creditor carries a 3-business-day rescission right.

Source: 12 CFR 1026.23(a)(1) & (f)(1)

Uniform State Content (SAFE Act)

1. Of the required pre-licensing hours, how many must cover federal law and regulations?
  1. 2
  2. 3
  3. 5
  4. 12
Show answer and explanation

Answer: B. 3
Correct — 3 hours federal law, 3 ethics, 2 nontraditional.

Source: 12 U.S.C. 5104(c)(2)

2. Which conviction permanently disqualifies an applicant for an MLO license regardless of when it occurred?
  1. A misdemeanor traffic offense 3 years ago
  2. A felony involving fraud or money laundering
  3. Any felony more than 7 years ago, of any type
  4. A civil judgment for unpaid debt
Show answer and explanation

Answer: B. A felony involving fraud or money laundering
Correct — felonies involving fraud, dishonesty, breach of trust, or money laundering disqualify at any time.

Source: 12 U.S.C. 5104(b)(2)

General mortgage knowledge

1. An ARM has 2/2/6 caps. The '6' refers to the:
  1. Initial adjustment cap
  2. Periodic adjustment cap
  3. Lifetime cap over the start rate
  4. Margin
Show answer and explanation

Answer: C. Lifetime cap over the start rate
Correct — rate cannot rise more than 6 points above the initial rate over the life of the loan.

Source: 12 CFR 1026.37(j)(6) (limits on interest rate changes) & 1026.37(j)(1)

2. The fully indexed rate on an ARM equals:
  1. Index + margin
  2. Index − margin
  3. Start rate + lifetime cap
  4. Margin + periodic cap
Show answer and explanation

Answer: A. Index + margin
Correct — index plus margin.

Source: 12 CFR 1026.37(j)(1)

Mortgage loan origination activities

1. A home sells for $300,000 and appraises at $310,000. The loan is $270,000. What is the LTV?
  1. 87.1%
  2. 90%
  3. 92%
  4. 95%
Show answer and explanation

Answer: B. 90%
Correct — $270,000 ÷ $300,000 = 90%.

Source: HUD Handbook 4000.1 II.A (Adjusted Value = lesser of price or value)

2. On a $250,000 loan, 2 discount points cost:
  1. $2,500
  2. $5,000
  3. $7,500
  4. $500
Show answer and explanation

Answer: B. $5,000
Correct — 2% × $250,000 = $5,000.

Source: CFPB: Points and lender credits

Ethics

1. An LO recommends a higher-rate loan to a qualified borrower primarily because it pays the LO more. This is:
  1. Permitted if disclosed
  2. Prohibited steering under the Reg Z LO compensation rule
  3. Allowed for brokers only
  4. Required by RESPA
Show answer and explanation

Answer: B. Prohibited steering under the Reg Z LO compensation rule
Correct — LOs can't steer consumers to a loan to increase their compensation unless it's in the consumer's interest.

Source: 12 CFR 1026.36(e)(1)

2. Repeatedly refinancing a borrower with little or no benefit to generate fees is known as:
  1. Loan flipping
  2. Loan modification
  3. Rate lock
  4. Recasting
Show answer and explanation

Answer: A. Loan flipping
Correct — a predatory practice.

Source: 12 CFR 1026.34(a)(3) (refinancing within one year)

Practice with every question

392 questions, each with an explanation for every option and an official source, plus a timed 120-question, 190-minute practice exam.

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Official sources

FAQ

What topics are on the MLO exam?

Federal mortgage-related laws, Uniform State Content, general mortgage knowledge, mortgage loan origination activities, and ethics, per the official NMLS content outline.

Does NMLS publish sample questions?

Yes. The NMLS Candidate Handbook has a short set of sample questions that show the format.

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