Here are 20 free NMLS SAFE practice questions written by MLO Pass, with the answer and a short explanation for each. They cover the same areas as the real SAFE MLO test: federal mortgage law, the SAFE Act, ethics, loan origination, general mortgage knowledge, and exam math. Answer each one in your head, then tap Show answer.
The real test has 120 questions (115 scored), 190 minutes, and a 75% passing score, which works out to roughly 95 seconds per question. Aim for 15 of 20 correct here, which is 75%.
How the real test is weighted
- Mortgage Loan Origination Activities: 27%
- Federal Mortgage-Related Laws: 24%
- General Mortgage Knowledge: 20%
- Ethics: 18%
- Uniform State Content: 11%
Want a list of every free practice resource, including the official NMLS sample questions? See Free NMLS SAFE Practice Test Options (2026).
Federal law questions
A borrower refinances the mortgage on her primary residence with a new lender. How long does she have to rescind under TILA?
- Until midnight of the 3rd business day after the latest of consummation, delivery of the rescission notice, or delivery of the material disclosures
- 3 calendar days after closing
- 7 business days after the Loan Estimate
- There is no right of rescission on a refinance
Show answer
Answer: A. The TILA right of rescission covers non-purchase loans secured by the borrower's principal dwelling. The clock runs to midnight of the third business day after the last of those three events. Purchase-money loans have no rescission right. Study this topic
A title agent gives an MLO a $100 gift card each time the MLO steers a borrower to the agent. Which law does this violate?
- RESPA Section 8
- ECOA
- HMDA
- The Homeowners Protection Act
Show answer
Answer: A. RESPA Section 8 bans giving or accepting any thing of value for referrals of settlement service business. Gift cards count, no matter how small. Study this topic
Under TRID, when must the creditor deliver or mail the Loan Estimate?
- Within 3 business days after receiving the application
- At least 3 business days before consummation
- Within 7 business days after the application
- At closing
Show answer
Answer: A. The Loan Estimate is due within 3 business days of application. The 3-business-days-before-consummation timing belongs to the Closing Disclosure. Study this topic
The borrower must receive the Closing Disclosure no later than:
- 3 business days before consummation
- 1 day before consummation
- At the closing table
- 10 days after application
Show answer
Answer: A. The consumer must receive the Closing Disclosure at least 3 business days before consummation. Certain changes, such as an APR that becomes inaccurate, start a new 3-day wait. Study this topic
Under ECOA and Regulation B, after receiving a completed application a creditor must notify the applicant of its decision within:
- 30 days
- 3 business days
- 60 days
- 90 days
Show answer
Answer: A. Regulation B requires notice of action taken within 30 days after receiving a completed application. A denial must include the reasons or a notice of the right to get them. Study this topic
A financial institution must file a Suspicious Activity Report within how many calendar days of initially detecting facts that may support a filing?
- 30 days
- 10 days
- 60 days
- 90 days
Show answer
Answer: A. Under the Bank Secrecy Act rules, a SAR is generally due within 30 calendar days of initial detection. Never tell the customer a SAR was filed. Study this topic
SAFE Act questions
An applicant was convicted of felony fraud 12 years ago. Can a state grant an MLO license?
- No. A felony involving fraud, dishonesty, breach of trust or money laundering is disqualifying at any time
- Yes, because the 7-year look-back has passed
- Yes, if the applicant passes the test with 80% or higher
- Only with a federal waiver
Show answer
Answer: A. The SAFE Act bars any felony in the 7 years before applying, and any felony involving fraud, dishonesty, breach of trust or money laundering at any time. Study this topic
A candidate fails the SAFE MLO test for the third time in a row. How long must she wait to retake it?
- 180 days
- 30 days
- 90 days
- 1 year
Show answer
Answer: A. A candidate waits 30 days after a first and a second failure, and 180 days after a third consecutive failure. Study this topic
An MLO employed by a federally insured bank to take mortgage applications must be:
- Registered through NMLS, not state-licensed
- State-licensed in every state where borrowers live
- Licensed and registered
- Neither licensed nor registered
Show answer
Answer: A. MLOs at depository institutions register through NMLS and get an NMLS ID. They do not have to complete pre-licensing education or pass the test to register. Study this topic
How many hours of continuing education must a state-licensed MLO complete each year at a minimum?
- 8 hours
- 20 hours
- 4 hours
- 12 hours
Show answer
Answer: A. The federal minimum is 8 hours a year: 3 of federal law, 2 of ethics, 2 on nontraditional mortgage lending, and 1 elective. Some states require more. Study this topic
Ethics questions
A borrower asks the MLO to round his income up a little on the application so he qualifies. What should the MLO do?
- Refuse. Knowingly misstating income is mortgage fraud
- Do it if the difference is under 5%
- Do it if the borrower signs a waiver
- Ask the processor to make the change instead
Show answer
Answer: A. Knowingly entering false information on a loan application is fraud no matter the size or who types it. Ethics is 18% of the national test. Study this topic
An ad says only "Rates as low as 5.25%." Under Regulation Z, what else must it state?
- The rate as an annual percentage rate (APR)
- The lender's net worth
- The borrower's credit score
- Nothing else
Show answer
Answer: A. If an ad states a rate of finance charge, it must state the rate as an APR, and if the APR may increase after consummation, it must say so. Study this topic
Loan origination and general knowledge
Which document is the borrower's personal promise to repay the debt?
- The promissory note
- The deed of trust
- The Closing Disclosure
- The title policy
Show answer
Answer: A. The note is the promise to repay. The mortgage or deed of trust is the security instrument that pledges the property as collateral. Study this topic
Under the Homeowners Protection Act, borrower-paid PMI on a conventional loan terminates automatically when the loan is scheduled to reach what LTV of the original value, if the borrower is current?
- 78%
- 80%
- 75%
- 90%
Show answer
Answer: A. The borrower may request cancellation at 80% of original value. Automatic termination happens at 78% on the original amortization schedule, if payments are current. Study this topic
Under RESPA, the maximum cushion a servicer may hold in an escrow account is:
- One-sixth of the estimated total annual escrow disbursements
- Three months of payments
- Ten percent of the loan balance
- Any amount the note allows
Show answer
Answer: A. RESPA caps the escrow cushion at one-sixth (about two months) of the estimated annual disbursements from the account. Study this topic
Exam math questions
Purchase price $300,000, appraised value $290,000, loan amount $261,000. What is the LTV?
- 90%
- 87%
- 88.5%
- 92%
Show answer
Answer: A. LTV uses the lower of price or appraised value: $261,000 ÷ $290,000 = 0.90, or 90%. Study this topic
How much do 2 discount points cost on a $250,000 loan?
- $5,000
- $2,500
- $500
- $20,000
Show answer
Answer: A. One point equals 1% of the loan amount. 2% × $250,000 = $5,000. Study this topic
Gross monthly income is $6,000. Proposed housing payment is $1,500, a car loan is $400, and credit card minimums are $100. What is the back-end DTI?
- 33.3%
- 25%
- 31.7%
- 26.7%
Show answer
Answer: A. Back-end DTI adds all monthly debts: $1,500 + $400 + $100 = $2,000. $2,000 ÷ $6,000 = 33.3%. The front-end ratio would be $1,500 ÷ $6,000 = 25%. Study this topic
What is the first month's interest on a $200,000 loan at 6% annual interest?
- $1,000
- $1,200
- $12,000
- $100
Show answer
Answer: A. $200,000 × 6% = $12,000 a year. $12,000 ÷ 12 = $1,000 for the first month. Study this topic
A $240,000 loan at 6.5% closes with 10 days of prepaid interest. Using a 365-day year, about how much is collected?
- $427.40
- $42.74
- $433.33
- $650.00
Show answer
Answer: A. $240,000 × 6.5% = $15,600 a year. $15,600 ÷ 365 = $42.74 a day. $42.74 × 10 = $427.40. (A 360-day year would give $433.33, so read the question for which year it uses.) Study this topic
How did you do?
- 17 to 20 correct: You are in good shape. Move on to full-length timed practice.
- 15 or 16 correct: Right at the passing line. Review the topics you missed.
- Under 15: Work through the SAFE MLO test content outline before you book the $110 test.
Keep practicing on MLO Pass
For a quick timed round, play the free Shot Clock Showdown (10 questions, 24 seconds each). When you want the full bank, a one-time $99 unlock of MLO Pass gives you about 1,154 questions across all five areas, full mock exams, an AI Trainer and a live readiness score. Pay once and keep it for life, with no subscription. Use code MLOPASS for a $20 credit at checkout. Sign up to pass your test
Related study guides
- How to Pass the NMLS SAFE Exam
- NMLS Exam Math: Mortgage Formulas and Worked Examples
- MLO License Requirements by State
Studying with other people taking the SAFE exam? Join the NMLS Test Prep community.